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Consider three independent samples drawn from a geometric distribution X_1; X_2; X_3 ∼ Geom(p), but that the value of the parameter p is unknown.

1. What is the value of p that maximizes the likelihood if x_1 = 1; x_2 = 2; x_3 = 1? (You need to solve for p and then also show that the value is indeed a maximum at p.)

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Final answer:

The value of p that maximizes the likelihood for the given geometric distribution samples with x_1=1, x_2=2 and x_3=1 is p=3/4. This is found by taking the derivative of the likelihood function and setting it to zero, confirming the value is a maximum by examining the trend of the function.

Step-by-step explanation:

To find the value of p that maximizes the likelihood for independent samples drawn from a geometric distribution with outcomes x_1=1, x_2=2, x_3=1, we must first write down the likelihood function of the geometric distribution. The probability mass function (PMF) for a geometric distribution is P(X=x) = p(1-p)^(x-1), where x is the number of trials up to and including the first success, and p is the probability of success on any individual trial.

The likelihood function L is the product of the individual probabilities for each observed sample:

L(p) = p(1-p)^(x_1-1) * p(1-p)^(x_2-1) * p(1-p)^(x_3-1)

Substituting the values we have, this becomes:

L(p) = p(1-p)^(1-1) * p(1-p)^(2-1) * p(1-p)^(1-1) which simplifies to L(p) = p^3(1-p).

To maximize this function, we take the derivative with respect to p and set it equal to zero:

L'(p) = 3p^2 - 4p^3

Setting the derivative equal to zero gives p = 3/4, which is the critical point. To show this maximizes the likelihood, we can examine the second derivative or observe that the likelihood function increases as p increases from 0 to 3/4 and then decreases as p goes from 3/4 to 1. Therefore, p = 3/4 maximizes the likelihood.

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