Gce Model Questions Vol1 2017 Civic Education Question 20
Practice objective / multiple choice question 20 from the 2017 Gce Model Questions Vol1 Civic Education examination.
A government agency implements an anti‑corruption programme that includes random audits. Each year, \(10\%\) of the agency's 200 contracts are selected for audit. The probability that a corrupt contract is detected during an audit is \(0.8\). Historically, \(15\%\) of all contracts are corrupt. If a corrupt contract that is not detected results in a loss of \(\text{₦}5,000,000\), while a detected corrupt contract leads to a fine of \(\text{₦}7,000,000\) (paid by the contractor) and the loss is avoided. Assuming the audit outcomes are independent, calculate the expected net financial impact (loss minus fines recovered) for the agency in a year.
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About This Question
This is Gce Model Questions Vol1 2017 Civic Education Question 20. It is one of the objective questions from the 2017 Gce Model Questions Vol1 Civic Education examination.
Difficulty level: Hard .
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