You might think that if you looked at the first digit in randomly selected numbers that the distribution would be uniform. Actually, it is not! Simon Newcomb and later Frank Benford both discovered that the digits occur according to the following distribution: (digit, probability) (1, 0.301), (2, 0.176), (3, 0.125), (4, 0.097), (5, 0.079), (6, 0.067), (7, 0.058), (8, 0.051), (9, 0.046) The IRS currently uses Benford's Law to detect fraudulent tax data. Suppose you work for the IRS and are investigating an individual suspected of embezzling. The first digit of 150 checks to a supposed company are as follows: Digit 1 2 4 6 78 9 Observed 33 18 25 22 18 16 11 7 -0 Frequency a. State the appropriate null and alternative hypotheses for this test. b. Explain why a = 0.01 is an appropriate choice for the level of significance in this situation. c. What is the P-Value? Report answer to 4 decimal places P-Value = d. What is your decision? O Fail to reject the Null Hypothesis O Reject the Null Hypothesis

You might think that if you looked at the first digit in randomly selected numbers that the distribution would be uniform. Actually, it is not! Simon Newcomb and later Frank Benford both discovered that the digits occur according to the following distribution: (digit, probability) (1, 0.301), (2, 0.176), (3, 0.125), (4, 0.097), (5, 0.079), (6, 0.067), (7, 0.058), (8, 0.051), (9, 0.046) The IRS currently uses Benford's Law to detect fraudulent tax data. Suppose you work for the IRS and are investigating an individual suspected of embezzling. The first digit of 150 checks to a supposed company are as follows: Digit 1 2 4 6 78 9 Observed 33 18 25 22 18 16 11 7 -0 Frequency a. State the appropriate null and alternative hypotheses for this test. b. Explain why a = 0.01 is an appropriate choice for the level of significance in this situation. c. What is the P-Value? Report answer to 4 decimal places P-Value = d. What is your decision? O Fail to reject the Null Hypothesis O Reject the Null Hypothesis

Glencoe Algebra 1, Student Edition, 9780079039897, 0079039898, 2018

18th Edition

ISBN:9780079039897

Author:Carter

Publisher:Carter

Chapter10: Statistics

Section10.4: Distributions Of Data

Problem 19PFA

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