Question: Repeat Problem 7.2.3 with Var(X1) = 1 and Var(X2) = 7. Problem 7.2.3 Suppose that E(X1) = Î¼, Var(X1) = 4, E(X2) = Î¼, and

Repeat Problem 7.2.3 with Var(X1) = 1 and Var(X2) = 7.
Problem 7.2.3
Suppose that E(X1) = Î¼, Var(X1) = 4, E(X2) = Î¼, and Var(X2) = 6.
(a) What is the variance of

(b) What value of p minimizes the variance of
= pX1 + (1 - p)X2?
(c) What is the relative efficiency of 1 to the point estimate with the smallest variance that you have found?

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