I need help with this question. I need a supporting paragraph.
Solution
Back-up Theory
Benford’s Law:
In naturally occurring numbers smaller digits occur more frequently as the first digit than larger digits. Digits 1, 2 and 3 account for approximately 60 percent of the total frequency.
Now to work out the solution,
Frequency distributions of the first digit in the given three cases are given below:
First digit |
Frequency |
||
Case 1 |
Case 2 |
Case 3 |
|
1 |
9 |
4 |
10 |
2 |
3 |
4 |
5 |
3 |
3 |
2 |
5 |
4 |
2 |
3 |
2 |
5 |
2 |
4 |
2 |
6 |
2 |
3 |
3 |
7 |
4 |
5 |
0 |
8 |
2 |
2 |
2 |
9 |
3 |
3 |
1 |
Total |
30 |
30 |
30 |
Case 1 and Case 3 follow Benford’s Law. But, Case 2 does not. So, the figures are not natural. Hence, it is reasonable to conclude that Case 2 is fraud. Answer
DONE
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