Problem bank

Problem 228 of 333MediumStatisticsP228

Five wins in five trades

  1. A new strategy wins all of its first 5 trades. Model each trade as an independent win with probability pp.

    (a) What is the MLE of pp, and why is it a poor answer?

    (b) With a Beta(2,2)(2,2) prior on pp, find the MAP estimate.

    (c) With a uniform prior, find the posterior mean. Compare it with (b).