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 146 checks to a supposed company are as follows: Digit 1 2 34 56 |7|8 |9 Observed Frequency 36 23 12 20 17 107| 147 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 146 checks to a supposed company are as follows: Digit 1 2 34 56 |7|8 |9 Observed Frequency 36 23 12 20 17 107| 147 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

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Description: I need help solving this You might think that if you looked at the first digit in randomly selected numbers that thedistribution would be uniform. Actually, it is not! Simon Newcomb and later Frank Benford bothdiscovered that the digits occur accordi

MATLAB: An Introduction with Applications

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Author:Amos Gilat

Publisher:Amos Gilat

Chapter1: Starting With Matlab

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Problem 1P

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Concept explainers

Types of Bias

Statistics is the study of data collection, organization, analysis, interpretation, and presentation. Statistical bias is a characteristic of a statistical technique or its findings in which the expected value deviates from the actual root quantitative parameter being estimated. According to the actual definition of bias, it refers to the tendency of a statistic to overestimate or underestimate a parameter.

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Question

I need help solving this

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 146 checks to a
supposed company are as follows:
Digit
1
2
3
4
5
6 78
Observed
36 23 | 12 20 | 17 107 14 7
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
e. Write a statement to the law enforcement officials that will use it to decide whether to pursue the
case further or not. Structure your essay as follows:
Given a brief explanation of what a Goodness of Fit test is.
Explain why a Goodness of Fit test should be applied in this situation.
State the hypotheses for this situation.
Interpret the answer to part c.
Use the answer to part c to justify the decision in part d.
Use the decision in part d to make a conclusion about whether the individual is likely to have
embezzled.
Use this to then tell the law enforcement officials whether they should pursue the case or not.

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