Answer to Question #207985 in Quantitative Methods for Yuler

Question

The local newspaper conducted a study of welfare claims in the area. 

It is reported that "more than 20% of the present welfare recipients 

are ineligible and should not be receiving monthly payments." You are 

hired by the welfare department to investigate the newspaper's claim. 

To do this you randomly select 400 recipients from the files and 

carefully investigate each one. You find that 100 should not be 

receiving payments because they filed false claims, failed to report 

that they work or committed other fraudulent acts. At the 0.01 level of 

significance, should the newspapers claim be accepted