Question

When working for the Brooklyn District Attorney, investigator Robert Burton analyzed the leading digits of amounts on checks from companies that were suspected of fraud. Among 784 checks, 61% had amounts with leading digits of 5. A 99% confidence interval estimate of the proportion of checks having amounts with leading digits of 5 is 0.565<p< 0.655 (using 478). When checks are issued in the normal course of honest transactions, it is expected that 7.9% of the checks will have amounts with leading digits of 5. What does the confidence interval suggest? Carefully and briefly, explain your answer X =

Answer 1

To test Ho: P = 0.079 Hi P & 0.079 gg % confidence interval is 0.565 L P L 0.655 Since the confidence interval does not include a the null value 0.019 ie 7.9% , we reject the hull hypothesis at x=0.01 Conclusion : Confidence interval suggests that the proportion of checles will have amount with leading digit of 5 is mon than 7.9% / 0

Since the lower liMit of confidence interval is 56.5% which is more than 7.9%, it suggests that proportion is more than 7.9%(not equal to 7.9%)