Solution

ID: past-exam-of-the-options-i-course-of-the-university-of-oxford/2011/o/2/a/solution

The Neyman-Pearson lemma concerns testing a simple null density against a simple alternative . A test that rejects where , accepts where the ratio is below , and if necessary randomizes on the boundary to have null rejection probability , is a most powerful test among tests of size at most . Thus a likelihood-ratio threshold maximizes power at the specified simple alternative. The boundary randomization is relevant for discrete distributions.

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