Solution

ID: past-exam-of-the-options-ii-course-of-the-university-of-oxford/2004/o/o4/b/solution

For any fixed below 1, the ratio to the null is
It increases with . Its ordering is therefore the same for every such alternative, while the size is determined only by the null. The very same rule, reject when , is most powerful against each alternative and hence is a uniformly most powerful test. At its power is 1, also optimal.
More generally, for , the binomial likelihood ratio against any increases with . Choose an integer cutoff so that
and reject for , randomize with probability
when , and accept below. This gives exact size and is a uniformly most powerful test for every positive integer . Exact prescribed size may require this boundary randomization; a deterministic cutoff alone need not attain it. For , reject all and reject at with probability , which is likewise optimal. At the stated one-sided alternative is empty. The cutoff generally depends on ; there is no claim that one fixed cutoff serves every null parameter.

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