Question: According to recent estimates, the likelihood that an individual who earns less than $200,000 will be audited by the Internal Revenue Service is 1%; the

According to recent estimates, the likelihood that an individual who earns less than $200,000 will be audited by the Internal Revenue Service is 1%; the chance that an individual making $200,000 to $1 million will be audited is put at 2.7%; and the chance that a person making over $1 million will be audited is 8.4%. Assume that these estimates are accurate. Suppose now you randomly choose three individuals, one in each of the three income categories. Defining “number of individuals in the group who will be audited” as your random variable,

a. Show all the possible values for the random variable.

b. Show the full probability distribution by assigning appropriate probabilities to all possible values of the random variable.

Step by Step Solution

3.53 Rating (173 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock

a Possible values for the random variable x 0 1 2 or 3 people audited b We can look at the group of ... View full answer

blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Document Format (1 attachment)

Word file Icon

486-M-S-D-P-D (624).docx

120 KBs Word File

Students Have Also Explored These Related Statistics Questions!