The Department of the Treasury is concerned because one member of Congress has charged that by normal

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The Department of the Treasury is concerned because one member of Congress has charged that by normal accounting standards, one-third of all savings and loans (S&Ls) in the country are bankrupt. To refute this claim, chief economist Tom Holbrook takes a sample of six savings and loans and finds that only one is insolvent (his staff had intended to gather a larger sample, but they were too busy processing S&L failures). If the true proportion of insolvencies is one-third, what is the probability that the Treasury Department would get the results that it did?

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Applied Statistics For Public And Nonprofit Administration

ISBN: 9781111342807

8th Edition

Authors: Kenneth J. Meier, Jeffrey L. Brudney, John Bohte

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