Click fraud has become a major concern as more and more companies advertise on the Internet. When Google places an ad for a company with its search results, the company pays a fee to Google each time someone clicks on the link. That’s fine when it’s a person who’s interested in buying a product or service, but not so good when it’s a computer program pretending to be a customer. An analysis of 1,200 clicks coming into a company’s site during a week identified 175 of these clicks as fraudulent.18
(a) Under what conditions does it make sense to treat these 1,200 clicks as a sample? What would be the population?
(b) Show the 95% confidence interval for the population proportion of fraudulent clicks in a form suitable for sharing with a nontechnical audience.
(c) If a company pays Google $4.50 for each click, give a confidence interval (again, to presentation precision) for the mean cost due to fraud per click.
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