Question #3
Reading: Reading 4 Big Data Projects
PDF File: Reading 4 Big Data Projects.pdf
Page: 2
Status: Unattempted
Part of Context Group: Q3-5
First in Group
Shared Context
Question
Karlsson is especially concerned about the possibility that her model may indicate that a bond will not default, but then the bond actually defaults. Karlsson decides to use the model's recall to evaluate this possibility. Based on the data in Exhibit 1, the model's recall is closest to:
Answer Choices:
A. 93%
B. 83%
C. 73%
Explanation
Recall that TP / (TP + FN) = 307 / (307 + 23) = 0.9303 = 93%.
Recall is useful when the cost of a false negative is high, such as when we predict that a
bond will not default but it actually will. In cases like this, high recall indicates that false
negatives will be minimized.