According to the February 2008 Federal Trade Commission report on consumer fraud and identity theft, 23% of all complaints in 2007 were for identity theft. In that year, in the state of ALASKA alone, there were 321 complaints of identity theft out of 1,432 consumer complaints.

(a) What is the random variable?

(b) What is the population parameter?

(c) Set up and run a test of hypothesis to determine if the data from ALASKA provides enough evidence to show that ALASKA had a lower proportion of identity theft than 23%. Use a level of significance of 5%. Specifically, do the following:

(i) Write down the null and alternative hypotheses.

(ii) State the type I and type II errors in this case and state a consequences of each type of error in the context of this problem.

(iii) Verify that the assumptions necessary to apply the test are satisfied.

(iv) What is the test statistic and what is the p-value?

(v) State your conclusion.