a. Choose the appropriate null hypothesis for this test. O Ho: The individual has been caught embezzling. O Ho: p1 + p2 + p3 # p4 # p5 p6 # p7 # p8 # p9 O Ho: At least one proportion is different. O Ho: pi = P2 = P3 = P4 Ho:P1 0.301, p2 0.176, p3 = 0.125, P4 0.097, p5 = 0.079, p6 = 0.067, p7 = 0.058, p8 0.051, pg = 0.046 b. What is the value of the test statistic. Round answer to at least 4 decimal places. c. What is the P-Value? Round answer to at least 4 decimal places. P-Value = d. What is your decision? O Fail to reject the Null Hypothesis Reject the Null Hypothesis e. Use the decision in part d to make a conclusion about whether the individual is likely to have embezzled. O The evidence shows that the individual may be guilty of embezzling. O There is no evidence that the individual is embezzling.

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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
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. Use a =
checks to a supposed company are as follows:
= 0.01. The first digit of 190
Observed
Digit
Frequency
1
52
2
23
3
25
4
23
5
24
11
7
5
8
19
9.
8
Transcribed Image Text: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 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. Use a = checks to a supposed company are as follows: = 0.01. The first digit of 190 Observed Digit Frequency 1 52 2 23 3 25 4 23 5 24 11 7 5 8 19 9. 8
a. Choose the appropriate null hypothesis for this test.
O Ho: The individual has been caught embezzling.
O Ho: P1 # p2 p3 + p4 # P5 p6 + p7 # p8 p9
O Ho: At least one proportion is different.
О Но: р1 — р2 — рз — р4
Ho:P1
0.301, p2
= 0.176, p3
0.125, P4
0.097, p5
= 0.079, p6 =
0.067, P7
0.058, p8 = 0.051, pg
0.046
b. What is the value of the test statistic. Round answer to at least 4 decimal places.
c. What is the P-Value? Round answer to at least 4 decimal places.
P-Value
d. What is your decision?
Fail to reject the Null Hypothesis
Reject the Null Hypothesis
e. Use the decision in part d to make a conclusion about whether the individual is likely to have
embezzled.
O The evidence shows that the individual may be guilty of embezzling.
O There is no evidence that the individual is embezzling.
Transcribed Image Text:a. Choose the appropriate null hypothesis for this test. O Ho: The individual has been caught embezzling. O Ho: P1 # p2 p3 + p4 # P5 p6 + p7 # p8 p9 O Ho: At least one proportion is different. О Но: р1 — р2 — рз — р4 Ho:P1 0.301, p2 = 0.176, p3 0.125, P4 0.097, p5 = 0.079, p6 = 0.067, P7 0.058, p8 = 0.051, pg 0.046 b. What is the value of the test statistic. Round answer to at least 4 decimal places. c. What is the P-Value? Round answer to at least 4 decimal places. P-Value d. What is your decision? Fail to reject the Null Hypothesis Reject the Null Hypothesis e. Use the decision in part d to make a conclusion about whether the individual is likely to have embezzled. O The evidence shows that the individual may be guilty of embezzling. O There is no evidence that the individual is embezzling.
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