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7. Benford鈥檚 law Refer to Exercise 5. The first digit of a randomly chosen expense account claim follows Benford鈥檚 law. Consider the events A = first digit is 7 or greater and B = first digit is odd.

(a) What outcomes make up the event A? What is P(A)?

(b) What outcomes make up the event B? What is P(B)?

(c) What outcomes make up the event 鈥淎 or B鈥? What is P(A or B)? Why is this probability not equal to P(A) + P(B)?

Short Answer

Expert verified

a)The outcomes that make up the event A is 0.155

b)The probability of P(B)is 0.609

c)P(AorB)P(A)+P(B)because the events are not mutually exclusive.

Step by step solution

01

Part (a) Step 1: Given Information

Given that the probability distribution X123456789Probability0.3010.1760.1250.0970.0790.0670.0580.0510.046
02

Part (a) Step 2:  Calculation

According to the information, consider Aas an event indicating that the first digit is 7or higher The following are the consequences of event A:

Outcomes={7,8,9}

P(A)can be calculated as:

localid="1649993368336" P(A)=P(X=7)+P(X=8)+P(X=9)=0.058+0.051+0.046=0.155

03

Part (b) Step 1: Given Information

Given that the probability distribution

Days01234567Probability0.680.050.070.080.050.040.010.02

04

Part (b) Step 2: Calculation

If Bis the event indicating that the first digit is odd, The results of eventBcan be written as follows:

Outcomes={1,3,5,7,9}

P(B)can be calculated as:

localid="1649993375643" P(B)=P(X=1)+P(X=3)+P(X=5)+P(X=7)+P(X=9)=0.301+0.125+0.079+0.058+0.046=0.609

05

Part (c) Step 1: Given Information

Given that the probability distribution

Days01234567Probability0.680.050.070.080.050.040.010.02

06

Part (c) Step 2: Calculation 

The outcomes for events Aand Bcan be written as follows, using the data from the previous sections:

Outcomes={1,3,5,7,8,9}

P(Aor B)can be calculated as:

localid="1649993383176" P(AorB)=P(X=1)+P(X=3)+P(X=5)+P(X=7)+P(X=8)+P(X=9)=0.301+0.125+0.079+0.058+0.051+0.046=0.660

localid="1649993386761" Here,P(AorB)P(A)+P(B)because the events are not mutually exclusive.

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