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Card 22 / 29:
The chance of an IRS audit for a tax return with over $25,000 in income is about 2% per year. We are interested in the expected number of audits a person with that income has in a 20-year period. Assume each year is independent.
In words, define the random variable X .List the values that X may take on.Give the distribution of X . X ~ _____(_____,_____)How many audits are expected in a 20-year period?Find the probability that a person is not audited at all.Find the probability that a person is audited more than twice.
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