Benford\'s Law claims that numbers chosen from very large data files tend to hav

Question

Benford's Law claims that numbers chosen from very large data files tend to have "1" as the first nonzero digit disproportionately often. In fact, research has shown that if you randomly draw a number from a very large data file, the probability of getting a number with "1" as the leading digit is about 0.301. Suppose you are an auditor for a very large corporation. The revenue report involves millions of numbers in a large computer file. Let us say you took a random sample of n = 463 numerical entries from the file and r = 122 of the entries had a first nonzero digit of 1. Let p represent the population proportion of all numbers in the corporate file that have a first nonzero digit of 1. Test the claim that p is less than 0.301 by using significance 0.1. What is the P-value of the test statistic? A.0.921 B.0.039 C.0.020 D.0.961 E.0.079

Explanation / Answer

here p=0.301 ; n=463

hence std error =(p(1-p)/n)1/2 =0.0213

phat=122/463=0.263

hence test stat z=(phat-p)/std error=-1.7592

p value for above test stat =0.039

option B is correct

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