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Show that the ISB in a bin containing the origin of the double exponen-tial density, f(x) = exp(-|x|)/2, is O(h3); hence, the discontinuity in the derivative of f does not have any asymptotic e ect on consistency. Compare when 0 and h/2 are bin edges. Formally, if f is the ordinary negative exponential density, R(f') is in nite because of the jump at zero (integral of the square of the Dirac delta function at 0), but R(f') is well-de ned for the double exponential.
Consider the exact MISE of a histogram when f = U(0; 1).
(a) If the mesh tk = kh is chosen where h = 1/m, show that MISE(m, n) = (m - 1)/n.
(b) If tk = (k + 1/2 )h with h = 1/m, show that
(c) Conclude that
Verify the inequalities for the adaptive MISE.
Find the optimal adaptive meshes for a skewed Beta density using a numerical optimization program.
Exercise: (Binomial and Continuous Model.) Consider a binomial model of a risky asset with the parameters r = 0:06, u = 0:059, d = 0:0562, S0 = 100, T = 1, 4t = 1=12. Note that u
Ask question From the household budget survey of 1980 of the Dutch Central Bureau of Statistics, J. S. Cramer obtained the following logit model based on a sample of 2820 househol
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