Use a 1% level of significance to test the claim that the distribution of first nonzero digits in this accounting file follows Benford's Law. (a) What is the level of significance? State the null and alternate hypotheses. He: The distributions are different. H: The distributions are different. H: The distributions are the same. H: The distributions are different. H₁: The distributions are the same. H: The distributions are the same. H: The distributions are the same. He: The distributions are different. (b) Find the value of the chi-square statistic for the sample. (Round the expected frequencies to at least three decimal places. Round the test statistic to three decimal places.) Are all the expected frequencies greater than 5? Yes No What sampling distribution will you use? uniform binomial normal chi-square Student's t What are the degrees of freedom? (c) Estimate the P-value of the sample test statistic. P-value > 0.100 0.050 < P-value < 0.100 0.005 < P-value < 0.010 P-value < 0.005 0.025< P-value < 0.050 0.010 Pvalue < 0.025

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10
Benford's Law states that the first nonzero digits of numbers drawn at random from a large complex data
file have the following probability distribution.t
First
Nonzero
Digit
Probabili
1
0.30
1
2
0.17
6
First Nonzero Digit 1
Sample Frequency
USE SALT
3
0.12
5
2 3
80 55 33
State the null and alternate hypotheses.
Ho: The distributions are different.
H: The distributions are different.
H: The distributions are the same.
H: The distributions are different.
H₁: The distributions are the same.
0.09
7
4
Are all the expected frequencies greater than 5?
Yes No
What sampling distribution will you use?
uniform binomial
What are the degrees of freedom?
4
22
normal chi-square
5
0.07
9
ty
Suppose that n = 275 numerical entries were drawn at random from a large accounting file of a major
corporation. The first nonzero digits were recorded for the sample.
6
0.06
7
Ho: The distributions are the same.
Ho: The distributions are the same.
Ho: The distributions are different.
(c) Estimate the P-value of the sample test statistic.
P-value > 0.100 0.050 < P-value < 0.100
0.005< P-value < 0.010 P-value < 0.005
5
6
21 18
7
13
Use a 1% level of significance to test the claim that the distribution of first nonzero digits in this
accounting file follows Benford's Law.
(a) What is the level of significance?
Student's t
7
0.05
8
8
8
17
0.05
1
(b) Find the value of the chi-square statistic for the sample. (Round the expected frequencies to at least
three decimal places. Round the test statistic to three decimal places.)
9
16
9
0.04
6
(d) Based on your answers in parts (a) to (c), will you reject or fail to reject the null hypothesis of
independence?
0.025 < P-value < 0.050 0.010 < P-value < 0.025
Since the P-value > a, we fail to reject the null hypothesis. Since the P-value > a, we reject the null
hypothesis.
Since the P-value s xx, we reject the null hypothesis. Since the P-values a, we fail
to reject the null hypothesis.
(e) Interpret your conclusion in the context of the application.
At the 1% level of significance, the evidence is sufficient to conclude that the distribution of first nonzero
dinite in the secounting file do not follow Danford'e Low
At the 10 laual of signifinonan the suidonea.
Transcribed Image Text:10 Benford's Law states that the first nonzero digits of numbers drawn at random from a large complex data file have the following probability distribution.t First Nonzero Digit Probabili 1 0.30 1 2 0.17 6 First Nonzero Digit 1 Sample Frequency USE SALT 3 0.12 5 2 3 80 55 33 State the null and alternate hypotheses. Ho: The distributions are different. H: The distributions are different. H: The distributions are the same. H: The distributions are different. H₁: The distributions are the same. 0.09 7 4 Are all the expected frequencies greater than 5? Yes No What sampling distribution will you use? uniform binomial What are the degrees of freedom? 4 22 normal chi-square 5 0.07 9 ty Suppose that n = 275 numerical entries were drawn at random from a large accounting file of a major corporation. The first nonzero digits were recorded for the sample. 6 0.06 7 Ho: The distributions are the same. Ho: The distributions are the same. Ho: The distributions are different. (c) Estimate the P-value of the sample test statistic. P-value > 0.100 0.050 < P-value < 0.100 0.005< P-value < 0.010 P-value < 0.005 5 6 21 18 7 13 Use a 1% level of significance to test the claim that the distribution of first nonzero digits in this accounting file follows Benford's Law. (a) What is the level of significance? Student's t 7 0.05 8 8 8 17 0.05 1 (b) Find the value of the chi-square statistic for the sample. (Round the expected frequencies to at least three decimal places. Round the test statistic to three decimal places.) 9 16 9 0.04 6 (d) Based on your answers in parts (a) to (c), will you reject or fail to reject the null hypothesis of independence? 0.025 < P-value < 0.050 0.010 < P-value < 0.025 Since the P-value > a, we fail to reject the null hypothesis. Since the P-value > a, we reject the null hypothesis. Since the P-value s xx, we reject the null hypothesis. Since the P-values a, we fail to reject the null hypothesis. (e) Interpret your conclusion in the context of the application. At the 1% level of significance, the evidence is sufficient to conclude that the distribution of first nonzero dinite in the secounting file do not follow Danford'e Low At the 10 laual of signifinonan the suidonea.
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