Question: Show that if M i = M and mi = m for all i, and if the cost function is C = c 1 n

Show that if Mi = M and mi = m for all i, and if the cost function is C = c1n + c2nm, then

cIM(MSW) 2(MSB-MSW 2(NM DR

minimizes the variance for fixed total cost C. Show the result with MSW and

MSB first, then use Exercise 24(b).

cIM(MSW) 2(MSB-MSW 2(NM DR

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