Question #5 - Reading 4 Big Data Projects

Reading: Reading 4 Big Data Projects

PDF File: Reading 4 Big Data Projects.pdf

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Shared Context

- 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: A) 93%. B) 83%. C) 73%.

Question

Karlsson also learns of the model measure of accuracy. Based on Exhibit 1, Karlsson's model's accuracy metric is closest to:

Answer Choices:

A. 79%

B. 89%

C. 69%.

Explanation

The model's accuracy is the percentage of correctly predicted classes out of total predictions. Model accuracy is calculated as: Accuracy = (TP + TN) / (TP + FP + TN + FN) = (TP + TN) / N = (307 + 113) / (307 + 31 + 113 + 23) = (307 + 113) / (474) = 0.8861 = 89%

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