Solution

ID: past-exam-of-the-mathematics-course-of-the-university-of-cambridge/2024/iii/paper-225/2/c/solution

Assume the null distribution is a centrally symmetric probability distribution, so and have the same law. A sign-flip randomization test draws signs independently and recomputes, for example,
The exact p-value averages over all sign vectors:
With random sign vectors, including the observed configuration, the standard Monte Carlo version is , where is the observed statistic. Joint sign invariance under the null makes this finite-sample valid.

New to topics? Read the docs here!