As an example of a situation in which several different statistics could reasona

Question

As an example of a situation in which several different statistics could reasonably be used to calculate a point estimate, consider a population of N invoices. Associated with each invoice is its "book value," the recorded amount of that invoice. Let T denote the total book value, a known amount. Some of these book values are erroneous. An audit will be carried out by randomly selecting n invoices and determining the audited (correct) value for each one. Suppose that the sample gives the following results (in dollars).

Explanation / Answer

1. Option B : N * X-bar

2. Option D : T + ND-bar

3. Option C :T * X-bar/Y-bar

4. N =5000 , T = 1761800 , X-bar = 344.4, Y-bar =370 , D-bar = 25.6

a. N * X-bar = 5000 * 344.4 = 1722000

b. T + ND-bar = 1761800 + 5000* 25.6 = 1889800

c. T * X-bar/Y-bar = 1761800 * 344.4/370 = 1639902.48

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