Solution

ID: past-exam-of-the-mathematics-course-of-the-university-of-cambridge/2014/iii/paper-35/1/b/solution

A conjugate prior is a family of prior distributions whose members remain in that family after updating by the likelihood function. Here multiplying a shape-rate gamma distribution density by the Poisson process likelihood changes its power of and its exponential rate, leaving a gamma distribution. The parameters change with the observations; conjugate prior does not mean that the Bayesian posterior equals the prior distribution.

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