Author Question: An accounting firm has noticed that of the companies it audits, 85 show no inventory shortages, 10 ... (Read 28 times)

APUS57 · **on:** Jun 24, 2018

An accounting firm has noticed that of the companies it audits, 85 show no inventory shortages, 10 show small inventory shortages and 5 show large inventory shortages. The firm has devised a new accounting test for which it believes the following probabilities hold: P(company will pass test no shortage) = .90 P(company will pass test small shortage) = .50 P(company will pass test large shortage) = .20
a. If a company being audited fails this test, what is the probability of a large or small inventory shortage?
b. If a company being audited passes this test, what is the probability of no inventory shortage?

Question 2

The interval estimate of the mean value of y for a given value of x is
a. prediction interval estimate
b. confidence interval estimate
c. average regression
d. x versus y correlation interval