Goodness-of-fits tests.

annc

New Member
#1
I honestly have no idea where to even start in this assignments. Any type of ell would be greatly appreciated. I can easily do the problems given in different forms but word problems have never been my strongest.

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 200 checks to a supposed company are as follows
(digit, frequency): (1, 36) (2, 32) (3, 28 ) (4, 26) (5, 23) (6, 17) (7, 15) (8, 16) (9, 7)

(a) State the appropriate hypotheses for this test.

(b) Decide an appropriate level of significance and justify, keeping in mind that someone faces a lot of trouble if guilty.

(c) Calculate the p-value and make a decision. (Round answer to four decimal places)

(d) Write a statement to the law enforcement officials that will use it to decide whether to pursue the case further or not. Include your conclusion and an explanation of the statistics used.