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Suppose that the IRS examiner of Exercise 2.12 correctly detects and flags 90% of all erroneous returns that he reviews. In addition, he mistakenly flags

Suppose that the IRS examiner of Exercise 2.12 correctly detects and flags 90% of all erroneous returns that he reviews. In addition, he mistakenly flags 2% of correct returns that he reviews. In addition, he mistakenly flags 2% of correct returns. Consider again his file of 30 tax returns, of which 5 contain errors.

(a) What is the probability that the first return has an error and is flagged?

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