Answer Happy

5. An investigator analyzed the leading digits from 769 checks issued by seven suspect companies. The frequencies were found to be 247, 148, 83, 84, 45, 45, 44, 36, and 37, 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 0.01 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 1 2 3 5 6 7 B 9 Actual Frequency 247 148 83 84 45 45 44 36 37 Benford's Law: Distribution of Leading Digits 30.1% 17.6% % 12.5% 9.7%. 7.9% 6.7% 5.8% 5.1% 4.6% 4 Determine the null and alternative hypotheses. Ho: (1) H, (2) Calculate the test statistic, y2 (Round to three decimal places as needed.) Calculate the P-value. P-value = (Round to four decimal places as needed.) State the conclusion Ho. Tharu (4) 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 (5) that the checks are the (3) result of fraud. 1 (1) O At most three leading digits have frequencies that do not conform to Benford's law. O At least two leading digits have frequencies that do not conform to Benford's law. At least one leading digit has a frequency that does not conform to Benford's law. The leading digits are from a population that conforms to Benford's law. (3) O Do not reject O Reject (4) O is not O is (2 (2) O The leading digits are from a population that conforms to Benford's law. O At most three leading digits have frequencies that do not conform to Benford's law. At least one leading digit has a frequency that does not conform to Benford's law. At least two leading digits have frequencies that do not conform to Benford's law. (5) O does appear O does not appear