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On each day t of n days, N customers of a supermarket were sampled and the number Xt expressing dissatisfaction was recorded. The results suggested that there were good and bad days for customer satisfaction.
(a) What kind of results might have led to this conclusion?
(b) What kind of model of Xt might be used?
(c) Derive expressions for the mean and variance of Xt under this model?
(d) Write down the likelihood of this model.
(e) What parameter constraints apply to this model?
(f) Suggest a reparameterisation for this model, explaining your reasoning.
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A payday loan company charges a $95 fee for a $500 payday loan that will be repaid in 11 days. Treating the fee as interest paid, what is the equivalent annual interest rate?
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One of the well-known class of models that involve a simple difference equation are models of mean reversion. These models typically take the form yt+1 - yt = -a(yt - μ)where 0
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