Statistics Graduate Level Quiz
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HYPOTHESIS TESTING
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After observing data, the posterior probabilities of two hypotheses are P(H0∣x)=0.65 and P(H1∣x)=0.35. The losses satisfy L(a0,H0)=1, L(a0,H1)=9, L(a1,H0)=7, and L(a1,H1)=2, where a0 denotes retaining H0 and a1 denotes rejecting H0.
Which action is Bayes, and what are the posterior expected losses of the two actions?
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