Suppose 5 % of all people filing the long income tax form seek deductions that they know are illegal, and an additional 2 % incorrectly list deductions because they are unfamiliar with income tax regulations. Of the 5 % who are guilty of cheating, 80 % will deny knowledge of the error if confronted by an investigator. If the filer of the long form is confronted with an unwarranted deduction and he or she denies the knowledge of the error, what is the probability that he or she is guilty? | Numer
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