Solution

ID: past-exam-of-the-probability-statistics-and-options-ii-course-of-the-university-of-oxford/2009/o/o5/ii/solution

With one parameter fitted to the grouped cells, the reference degrees of freedom are . The table already gives a deviance of at , so the minimized deviance is no larger than that; its direct grouped minimum is about . Either is below the supplied critical value . Therefore do not reject the fitted grouped log-series model at level five percent. The estimate being profiled in this test is the grouped-likelihood estimate described above, not the different full-data score estimate.

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