Question

In: Statistics and Probability

A large number of insurance records are to be examined to develop a model for predictive...

A large number of insurance records are to be examined to develop a model for predictive fraudulent claims. One of the claims in the historical database, 1% were judged to be fraudulent. A sample is taken to develop a model, and oversampling is used to provide a balance sample in light oath very low response date. When applied to this sample (n=800), the model ends up correctly classifying 310 frauds, and 270 nonfrauds. it missed 90 frauds, and classified 130 records incorrectly as frauds when they were not. a. Produce the classification matrix for the sample as it stands. b. Find the adjusted misclassification rate (adjusting for the oversampling). c. What percentage of new records would you expect to be classified as fraudulent? I already received an answer for the misclassification 220/800=27.54. then the model ends up classifying 57.51% of the frauds 1's... PLEASE explain how to get 57.5%. Thanks

Solutions

Expert Solution

orchestra answered 2 years ago
Next > < Previous

Related Solutions

When will a company use a predictive decision model?
 When will a company use a predictive decision model? A. When it wishes to determine the best product pricing to maximize revenue. B. When it wishes to know how best to use advertising strategies to influence sales. C. When it wishes to know sales patterns to plan inventory levels. D. When it wishes to ensure that a specified level of customer service is achieved.  Which of the following is necessary to calculate the variable cost of production for the company to develop a profit model? A. unit sale price B. quantity of item produced C. quantity of item sold D....
Use Excel to develop a regression model for the Hospital Database to predict the number of...
Use Excel to develop a regression model for the Hospital Database to predict the number of Personnel by the number of Births. How many residuals are within 1 standard error? Write your answer as a whole number. Personnel Births 792 312 1762 1077 2310 1027 328 355 181 168 1077 3810 742 735 131 1 1594 1733 233 257 241 169 203 430 325 0 676 2049 347 211 79 16 505 2648 1543 2450 755 1465 959 0 325...
Use Excel to develop a regression model for the Hospital Database to predict the number of...
Use Excel to develop a regression model for the Hospital Database to predict the number of Personnel by the number of Births. How many residuals are within 1 standard error? Write your answer as a whole number. Personnel(y) Births(x) 792 312 1762 1077 2310 1027 328 355 181 168 1077 3810 742 735 131 1 1594 1733 233 257 241 169 203 430 325 0 676 2049 347 211 79 16 505 2648 1543 2450 755 1465 959 0 325...
An electronics company is looking to develop a regression model to predict the number of units...
An electronics company is looking to develop a regression model to predict the number of units sold for a special running watch. Data is provided below: Sales (units) Price ($) Advertising ($) Holiday 500 100 50 Yes 480 120 40 Yes 485 110 45 No 510 103 55 Yes 490 108 40 No 488 109 30 No 496 106 45 Yes Compile a spreadsheet for the data and determine the predicted number of units sold if the watch is sold...
An electronics company is looking to develop a regression model to predict the number of units...
An electronics company is looking to develop a regression model to predict the number of units sold for a special running watch. Data is provided below: Sales (units) Price ($) Advertising ($) Holiday 500 100 50 Yes 480 120 40 Yes 485 110 45 No 510 103 55 Yes 490 108 40 No 488 109 30 No 496 106 45 Yes Compile an excel spreadsheet for the above data and determine the regression equation Answer (a) X3 = 1 if...
advantages and limitations of maxent model vs glm model which model  suggest to use for large number...
advantages and limitations of maxent model vs glm model which model  suggest to use for large number of datasets
The ecological model asserts that individuals develop and grow within a number of reciprocal systems. These...
The ecological model asserts that individuals develop and grow within a number of reciprocal systems. These systems include the micro-system, meso-system, exo-system, macro-system, and chronosystem, with the individual at the center. The ecological model is very helpful in understanding at-risk families and youth and guiding advocacy efforts. Choose one person from a book or movie. Explain the problems this person is facing that may put him/her at-risk. Discuss, in depth and in detail, how each system in the ecological model...
Use Excel to develop a multiple regression model to predict Cost of Materials by Number of...
Use Excel to develop a multiple regression model to predict Cost of Materials by Number of Employees, New Capital Expenditures, Value Added by Manufacture, and End-of-Year Inventories. Locate the observed value that is in Industrial Group 12 and has 7 employees. Based on the model and the multiple regression output, what is the corresponding residual of this observation? Write your answer as a number, round to 2 decimal places. SIC Code No. Emp. No. Prod. Wkrs. Value Added by Mfg....
You will utilize a large dataset to create a predictive analytics algorithm in Python. For this...
You will utilize a large dataset to create a predictive analytics algorithm in Python. For this assignment, complete the following: Utilize one of the following Web sites to identify a dataset to use, preferably over 500K from Google databases, kaggle, or the .gov data website Utilize a machine learning algorithm to create a prediction. K-nearest neighbors is recommended as an introductory algorithm. Your algorithm should read in the dataset, segmenting the data with 70% used for training and 30% used...
Part A: You have been hired by a company to build a predictive analytics model to...
Part A: You have been hired by a company to build a predictive analytics model to increase their sales. Before building the model, your manager asked you to start with exploratory data analysis and report the findings. Which visualization tools would you use to display important properties of data such as outliers, range of data, mean, IQR, and distribution of data, etc.? Be specific about the tools and methods that display the skewness, similarity of distributions, and whether data comes...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT