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An investigator analyzed the leading digits from 797 checks issued by seven suspect companies. The frequencies were found to be 0, 19, 2, 50, 361, 309, 10, 22, and 24, and those digits correspond to the leading digits of 1, 2, 3, 4, 5, 6, 7, 8, and 9, respectively. If the observed frequencies are substantially different from the frequencies expected with Benford's law shown below, the check amounts appear to result from fraud. Use a 0.10 significance level to test for goodness-of-fit with Benford's law. Does it appear that the checks are the result of fraud? Leading Digit Actual Frequency Benford's Law: Distribution of Leading Digits 1 2 3 4 5 6 7 8 9 0 19 2 50 361 309 10 22 24 30.1% 17.6% 12.5% 9.7% 7.9% 6.7% 5.8% 5.1% 4.6% Determine the null and alternative hypotheses. Ho The leading digits are from a population that conforms to Benford's law. H₁: At least one leading digit has a frequency that does not conform to Benford's law. Calculate the test statistic, x². x² = (Round to three decimal places as needed.) Calculate the P-value. P-value = (Round to four decimal places as needed.) State the conclusion. Ho. There checks are the result of fraud. sufficient evidence to warrant rejection of the claim that the leading digits are from a population with a distribution that conforms to Benford's law. It that the

An investigator analyzed the leading digits from 797 checks issued by seven suspect companies. The frequencies were found to be 0, 19, 2, 50, 361, 309, 10, 22, and 24, and those digits correspond to the leading digits of 1, 2, 3, 4, 5, 6, 7, 8, and 9, respectively. If the observed frequencies are substantially different from the frequencies expected with Benford's law shown below, the check amounts appear to result from fraud. Use a 0.10 significance level to test for goodness-of-fit with Benford's law. Does it appear that the checks are the result of fraud? Leading Digit Actual Frequency Benford's Law: Distribution of Leading Digits 1 2 3 4 5 6 7 8 9 0 19 2 50 361 309 10 22 24 30.1% 17.6% 12.5% 9.7% 7.9% 6.7% 5.8% 5.1% 4.6% Determine the null and alternative hypotheses. Ho The leading digits are from a population that conforms to Benford's law. H₁: At least one leading digit has a frequency that does not conform to Benford's law. Calculate the test statistic, x². x² = (Round to three decimal places as needed.) Calculate the P-value. P-value = (Round to four decimal places as needed.) State the conclusion. Ho. There checks are the result of fraud. sufficient evidence to warrant rejection of the claim that the leading digits are from a population with a distribution that conforms to Benford's law. It that the

Glencoe Algebra 1, Student Edition, 9780079039897, 0079039898, 2018
Glencoe Algebra 1, Student Edition, 9780079039897, 0079039898, 2018
18th Edition
ISBN:9780079039897
Author:Carter
Publisher:Carter
Chapter10: Statistics
Section10.6: Summarizing Categorical Data
Problem 4AGP
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An investigator analyzed the leading digits from 797 checks issued by seven suspect companies. The frequencies were found to be 0, 19, 2, 50, 361, 309, 10, 22, and 24, and those digits correspond to the leading digits of 1, 2, 3, 4, 5, 6, 7, 8, and 9, respectively. If the observed frequencies are substantially different from the frequencies expected with Benford's law shown below, the check amounts appear to result from fraud. Use a 0.10 significance level to test for goodness-of-fit with Benford's law. Does it appear that the checks are the result of fraud? Leading Digit Actual Frequency Benford's Law: Distribution of Leading Digits 1 2 3 4 5 6 7 8 9 0 19 2 50 361 309 10 22 24 30.1% 17.6% 12.5% 9.7% 7.9% 6.7% 5.8% 5.1% 4.6% Determine the null and alternative hypotheses. Ho The leading digits are from a population that conforms to Benford's law. H₁: At least one leading digit has a frequency that does not conform to Benford's law. Calculate the test statistic, x². x² = (Round to three decimal places as needed.) Calculate the P-value. P-value = (Round to four decimal places as needed.) State the conclusion. Ho. There checks are the result of fraud. sufficient evidence to warrant rejection of the claim that the leading digits are from a population with a distribution that conforms to Benford's law. It that the
Transcribed Image Text:An investigator analyzed the leading digits from 797 checks issued by seven suspect companies. The frequencies were found to be 0, 19, 2, 50, 361, 309, 10, 22, and 24, and those digits correspond to the leading digits of 1, 2, 3, 4, 5, 6, 7, 8, and 9, respectively. If the observed frequencies are substantially different from the frequencies expected with Benford's law shown below, the check amounts appear to result from fraud. Use a 0.10 significance level to test for goodness-of-fit with Benford's law. Does it appear that the checks are the result of fraud? Leading Digit Actual Frequency Benford's Law: Distribution of Leading Digits 1 2 3 4 5 6 7 8 9 0 19 2 50 361 309 10 22 24 30.1% 17.6% 12.5% 9.7% 7.9% 6.7% 5.8% 5.1% 4.6% Determine the null and alternative hypotheses. Ho The leading digits are from a population that conforms to Benford's law. H₁: At least one leading digit has a frequency that does not conform to Benford's law. Calculate the test statistic, x². x² = (Round to three decimal places as needed.) Calculate the P-value. P-value = (Round to four decimal places as needed.) State the conclusion. Ho. There checks are the result of fraud. sufficient evidence to warrant rejection of the claim that the leading digits are from a population with a distribution that conforms to Benford's law. It that the
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