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Success probability that makes eight of twelve most likely

Question

A random variable YY is binomial with 1212 trials and success probability p∈(0,1)p\in(0,1). For which pp is P(Y=8)\mathbb{P}(Y=8) as large as possible?

Short answer

p=23p=\tfrac23. Maximise log⁡[p8(1−p)4]=8log⁡p+4log⁡(1−p)\log\big[p^8(1-p)^4\big]=8\log p+4\log(1-p): the derivative 8p−41−p\tfrac8p-\tfrac4{1-p} vanishes at p=812p=\tfrac{8}{12}. In general P(Y=k)\mathbb{P}(Y=k) is maximised at the sample proportion p=k/np=k/n (the maximum-likelihood estimate).

Adapted from QuantQuestions.io; question and answer rewritten by SelfMadeQuant.com.

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