Description
Five problems:
1.8
1.10
1.13
A. Consider a function, y(θ) = θTθ + V 2[1, 2]θ, where θ ∈ 2 and V is a random variable
with distribution N(2, 8). First, find the minimum θ to L(θ) = E[y(θ)]. Then, find the
minimum to the function resulting from replacing V by its mean value (i.e., the “flaw of
averages”). Compare the values of L(θ) for the two solutions. Comment on why the two
solutions differ.
B. Exercise 4 in week 1 handout (file MonteCarlo_intro_handout.pdf, corresponding to
slides shown in class). Write your own code (submit code with homework).