Benford\'s Law, RSF and Luhn\'s Algorithm PDF

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1. For which of the following samples Benford’s Law can be applied effectively? a. Sample A – composed of 2,500 different expenses paid in cash b. Sample B – composed of religion profile of 10,000 individuals in India c. Sample C – composed of body weights (before and after) as logged in clinical trials (1500 nos) by a pharmaceutical company with respect to their fat loss capsule d. Sample D – composed of GDP figures quoted by a country for the past 5 years 2. An excel function that can be used for applying Benford’s Law is: a. Upper b. Left c. Value d. Concatenate 3. Benford’s Law is based on: a. Leading digit b. Succeeding digit c. Ultimate digit d. Pen-ultimate digit 4. Benford’s Law makes use of the mathematical concept of: a. Calculus b. Linear programming c. Logarithm d. Mathematical induction 5. Which of the following could be a red flag? a. Credit card number used in an online transaction was 4696452020312678 b. In a data set composed of hourly wage rates of a particular class of workers, the frequency of 1 being the 1st digit was 0% c. The ratio between the largest and the second largest value for a series of purchases from a vendor turned out to be 25.356 d. A data set of mobile phone numbers as given by a telecom company didn’t conform with the Benford’s Law 6. A tool used to identify outliers is: a. Relative Size Factor b. Benford’s Law c. Luhn’s Algorithm d. Correlation analysis

7. Following is an RSF calculation submitted by Mita to her boss:

The boss is not satisfied the way RSF have been calculated. He suspects that some error lies with respect to sorting of data. For your reference, the sorting scheme has been outlined in the above image. According to you, what should be the right scheme of sorting, before calculating RSF? a. b. c. d.

Sort by date alone Sort by vendor no and then by purchase amount Sort by date and then by vendor no Sort by vendor no and then by date

8. As a thumb rule, records having RSF value greater than _______ need to be examined closely. a. 15 b. 50 c. 10 d. 12 9. For Benford’s law to work, the numbers need to be minimum ______ digit long. a. 5 b. 3 c. 4 d. 6 10. Which of the following statements is incorrect? a. Luhn’s algorithm is a simple checksum formula used to validate a variety of identification numbers b. RSF cannot be calculated for parties with whom we have entered into a single transaction

c. Probability of 3 being the 1st digit of a number is more than 7 being the 1st digit d. Benford’s Law, when applied, gives a conclusive evidence about fraud that has taken place 11. Which of the following will not be used in the application of Benford’s Law? a. Charts b. Data validation c. Pivot Tables d. Left function 12. For which of the following data sets Benford’s Law cannot be applied? a. Sales made by a manufacturing company b. Salaries paid by a software company c. The average age of completing graduation in Mumbai university, year after year d. Financial aids given by a charitable trust for medical expenses of poor and needy 13. The line graph depicting probabilities as given by Benford’s Law will be: a. Parallel to X-axis b. Parallel to Y-axis c. Upward sloping from left to right d. Downward sloping from left to right 14. The formula used for deriving Benford’s Law probability for a digit ‘n’ being the 1st digit is: a. Log10(1 + 1 / n) b. Log10(1 + n) c. Loge(1 + 1 / n) d. Loge(1 + n) 15. When a check digit is appended to an identification number, the final sum of the digits on application of Luhn’s algorithm on the resultant identification number should be divisible by: a. 5 b. 10 c. 50 d. 100 16. Calculate Relative Size Factor (RSF) for the data values: Rs 10,000 ; Rs 7,200 ; Rs 300; Rs 85,000 ; Rs 9,000 ; Rs 540 ; Rs 75,000 ; Rs 28,000 ; Rs 5,400 ; Rs 11,200. a. 1.133

b. 1.313 c. 2.679 d. 283.333 17. Relative Size Factor (RSF) value is always greater than or equal to ______ a. 2 b. 1 c. 3 d. 0 18. Vidula says, “The last digit of an IMEI number (related to mobile phones) is derived based on Luhn’s algorithm”. Venkat says, “There are nine possible digits that can occupy the place of the leading digit for any number. Accordingly, the probability that the leading digit is 5 will be 1/9” Which of the following is true? a. Vidula and Venkat both are right b. Vidula is right but Venkat is wrong c. Vidula is wrong but Venkat is right d. Vidula and Venkat both are wrong 19. What will be the check digit (the last digit) for the credit card no 469645202031267, as per Luhn’s algorithm? a. 5 b. 6 c. 7 d. 8 20. Which of the following excel functionality is irrelevant for calculation of Relative Size Factor (RSF)? a. Filter b. Sort c. If function d. Left function...