Question
I am confused on these statistics problems. 1) Dollar-unit-sampling is a method of selecting invoices for audit where the probability of selection is proportional to
I am confused on these statistics problems.
1) Dollar-unit-sampling is a method of selecting invoices for audit where the probability of selection is proportional to the dollar value of the invoice. Suppose that an auditor has 120 invoices that total $123,000. The probability that an invoice of $1000 is selected for audit is:
a) 1/120.b) 1/123,000.c) 1000/123,000.d) 120/123,000.
2) Dollar-unit-sampling is a method of selecting invoices for audit where the probability of selection is proportional to the dollar value of the invoice. Suppose that an auditor has 120 invoices for a total dollar value of $123,000. The total dollar value of 75 small-valued invoices is $10,000. The auditor picks an invoice for audit by randomly picking $1 and finding the invoice to which it belongs. What is the probability that a small-valued invoice will be selected?a) 10,000/123,000.b) 75/120.c) 75/10,000.d) 1/75.
3) The following diagram represents the approximate density curve of the dollar value of invoices for a small convenience store (the $0 invoices represent amounts less than $1):
What is the probability that a randomly chosen invoice will be more than $5000? Hint: the area of the entire triangle must equal 1 and is found as.a) 5000/10,000.b) 1/5000.c) 5000/20,000.d) 1/10,000.
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