Question 1 Pinky Bauer, Chief Financial Officer of Harrison Haulers, Inc., suspe

Question

Question 1 Pinky Bauer, Chief Financial Officer of Harrison Haulers, Inc., suspects irregularities in the payroll system, and orders an inspection of a random sample of vouchers issued since January 1, 2006. A sample of ten vouchers is randomly selected, without replacement, from the population of 2,000 vouchers. Each voucher in the sample is examined for errors and the number of vouchers in the sample with errors is denoted by x. If 20% of the population of vouchers contains errors, the 0 1.60 O 0.00 O 14.14 3.16 O 1.26

Explanation / Answer

Sol:

p=prob of success=20%=0.2

n=sample size=10

np=10*0.2=2<10

n(1-p)=10*1(1-0.2)=10*0.8=8<10

use binomial distribution

standard deviation of X=sqrt(npq)

=sqrt(n*p*(1-p)

=sqrt(10*0.2(1-0.2)

=sqrt(10*0.2*0.8)

=1.264911

=1.26(rounding to 2 decimals)

standard deviation=1.26

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