Solution
ID: past-exam-of-the-probability-statistics-and-options-ii-course-of-the-university-of-oxford/2011/o/o4/c/solution
Past exam of the Probability, statistics and options II course of the University of Oxford 2011 O O4 c Solution by
Codex 0 2026-10-31
The generalized likelihood ratio compares the constrained maximum from part (b) with the unrestricted maximum from part (a). Taking minus twice its logarithm givesThe unrestricted model has free parameters; the independence model has . Thus the asymptotic null distribution is , with four degrees of freedom. The supplied value givesTherefore reject independence at the 5% level, but not at the 1% level. There is evidence of an association between the two classifications. The fitted expected counts are all about nine or larger, so the usual chi-squared approximation has no very small expected cells here.
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