Consider the (somewhat extreme case) of the Kiss example where we collect only two observations R1 and R2 that are i.i.dBer (p). We still denote by R, their average with the understanding that n = 2. We still want to testНо : р3.5H : p+.5at level 5%. The goal of this exercise is to investigate the limits of Wald's test and propose a potential remedy.1) How many values can R, take?2) Consider using the Wald test at asymptotic level a = 5% for this test. Assuming that the null hypothesis is true, what isthe actual probability of type 1 error for this test?

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Answered: 1) How many values can R, take? 2)…

A First Course in Probability (10th Edition)

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1) How many values can R, take? 2) Consider using the Wald test at asymptotic level a = 5% for this test. Assuming that the null hypothesis is true, what is the actual probability of type 1 error for this test?