The manufacturer of the new medication feels

Reference no: EM131137844

Suppose that in Example 1 the manufacturer of the new medication feels that the odds are 4 to 1 that with this medication the recovery rate from the disease is 0.90 rather than 0.60. With these odds, what are the probabilities that he will make a wrong decision if he uses the decision Function

Example 1

Suppose that the manufacturer of a new medication wants to test the null hypothesis θ = 0.90 against the alternative hypothesis θ = 0.60. His test statistic is X, the observed number of successes (recoveries) in 20 trials, and he will accept the null hypothesis if x > 14; otherwise, he will reject it. Find α and β.

Reference no: EM131137844

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