The first significant digit in any number must be1, 2,3, 4,5, 6,7, 8, or 9. It was discovered that first digits do not occur with equal frequency. Probabilities of occurrence to the first digit in a number are shown in the accompanying table. The probability distribution is now known asBenford's Law. Forexample, the following distribution represents the first digits in 209 allegedly fraudulent checks written to a bogus company by an employee attempting to embezzle funds from his employer. Complete parts (a) and (b) below.

What is the teststatistic?

20=

(Round to three decimal places asneeded.)

What is the range ofP-values for thetest?

The range ofP-values for the test is:

Using theP-value approach, compare the range ofP-values with the given =0.01 level of significance. Based on theresults, do the first digits obeyBenford's Law?

A.

DonotrejecttheH0 because the range ofP-values is less than the given level of significance.

B.

DonotrejecttheH0 because the range ofP-values is greater than the given level of significance.

C.

RejecttheH0 because the range ofP-values is greater than the given level of significance.

D.

RejecttheH0 because the range ofP-values is less than the given level of significance.

(c) Based on the results of part(b), could one think that the employee is guilty ofembezzlement?

A.

Yes, the first digitsdonotobey Benford's Law.

B.

No, the first digitsobey Benford's Law.

C.

Yes, the first digitsobey Benford's Law.

D.

No, the first digitsdonotobey Benford's Law.