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Part BCSIR NET December 2023

MLE and method of moments

The probability of a head in tossing a coin is p ∈ (0, 1). The coin is independently tossed 25 times and heads appear 10 times. The Bayes estimate of p with respect to the prior Beta(5, 5) and squared error loss is

  1. A.3/7✓ Correct
  2. B.3/5
  3. C.1/2
  4. D.2/5

The idea, in plain words

Starting beliefs of this shape and coin-toss data fit together perfectly: the update is just adding the observed heads and tails to the two starting counts. The answer is then the average of the updated belief.

Solution

Posterior is Beta(5 + 10, 5 + 15) = Beta(15, 20) with mean 15/35 = 3/7.

Why each option is right or wrong

Checked against 3 symbolic computations
  • A.Correct

    True.

    The Beta prior is conjugate to the binomial likelihood: with prior Beta(a, b) and x successes in n trials, the posterior is Beta(a + x, b + n − x) = Beta(5 + 10, 5 + 15) = Beta(15, 20).

    Under squared error loss the Bayes estimate is the posterior mean, 15/(15 + 20) = 3/7 (verified).

    The trigger: squared error loss always means posterior mean — add successes to the first parameter, failures to the second, then take the mean.

  • B.Wrong

    False.

    3/5 does not arise from either the prior or the data.

    It would be the posterior mean if the counts were reversed — 15 heads and 10 tails on top of the prior — so it is what a transposed update produces.

  • False — 1/2 is the prior mean, 5/(5 + 5) (verified).

    Choosing it means never updating: the data pull the estimate down from 1/2 towards the observed proportion

    landing at 3/7.

    A Bayes estimate equal to the prior mean would require the data to say nothing at all.

  • False — 2/5 is the maximum likelihood estimate, 10/25 (verified)

    which is the answer with no prior at all.

    The Bayes estimate always lies strictly between the prior mean 1/2 and the MLE 2/5, and 3/7 ≈ 0.4286 does exactly that.

    Seeing your answer sit outside that interval is a quick sanity check.

2 of these 3 wrong options correspond to a named reasoning error — the same errors recur across subjects.

Related counterexample: The MLE is unbiased

More on this topic

The chapter behind this: Maximum likelihood and the method of moments — free to read

From Estimation › MLE and method of moments

Last revised . Found a mistake? Tell us — corrections are the fastest thing we act on.

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