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Solutions to homework problems related to statistical modeling and bayesian inference. Topics include defining statistical concepts, creating statistical models, identifying parameters of interest, and calculating posterior distributions using bayes' theorem.
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HW 9 due 11/
(a) Define Nature, Design and Measurement, and DATA. (b) Write down a statistical model for {Nature + Design and Measurement} that you are willing to assume produces the DATA in your study. (c) Identify a particular parameter θ that is part of your statistical model you identified in (b). Explain why you are interested in this parameter. (d) Draw a graph, by hand, of your prior distribution of θ for your example. Explain your logic.
(a) Find the posterior distribution of θ assuming a uniform (0,10) prior. (b) Find the posterior probability that θ is greater than 4.0.
(a) Find the posterior distribution of θ assuming a uniform (0,10) prior. (b) Find the posterior probability that θ is greater than 4.0. (Big picture alert: Data reduce uncertainty. More data, more reduction.)
(a) Display the histograms that estimate the posterior distribution of this probability for the cases X = − 1 , X = 0, and X = 1. Explain meanings of these histograms, tutorial-style, so that someone other than your professor may understand, with special emphasis on the application to stock returns (both Eastman Kodak and S&P 500), and also incorporating concepts of Bayesian analysis. (b) For each of the three cases indicated in (a), estimate the posterior probability that the probability in question is greater than 0.5. Explain meanings of these esti- mates, tutorial-style, so that someone other than your professor may understand, with special emphasis on the application to stock returns, and also incorporating concepts of Bayesian analysis.