Benford's Law states that the first nonzero digits of numbers drawn at random from a large complex data file have the following probability distribution.†
Suppose thatn = 275 numerical entries were drawn at random from a large accounting file of a major corporation. The first nonzero digits were recorded for the sample.
Use a 1% level of significance to test the claim that the distribution of first nonzero digits in this accounting file follows Benford's Law.
(b) Find the value of the chi-square statistic for the sample. (Round the expected frequencies to at least three decimal places. Round the test statistic to three decimal places.)
What are the degrees of freedom?
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