The number that comes out is way lower than you'd expect and I remember second-guessing my arithmetic twice.
Recognize this as a Bayes' theorem problem and set up the calculation using the given base rate and accuracy. Compute the probability that a flagged user is actually bad by considering both true positives and false positives. Clearly state the assumptions and interpret the result in the context of the model's practical utility.
Pro tip: Emphasize that high accuracy can be misleading with imbalanced classes, and discuss how the base rate (5% bad) drastically reduces the precision of a positive flag. This shows you understand the difference between accuracy and precision, a key concept in applied data science.
Extract the base rate (P(Bad) = 0.05), sensitivity (P(Flag|Bad) = 0.95), and specificity (P(Not Flag|Good) = 0.95). Note that P(Good) = 0.95.
Use the formula P(Bad|Flag) = P(Flag|Bad) * P(Bad) / [P(Flag|Bad)*P(Bad) + P(Flag|Good)*P(Good)].
Calculate the numerator: 0.95 * 0.05 = 0.0475. Calculate the denominator: 0.0475 + (0.05 * 0.95) = 0.0475 + 0.0475 = 0.095.
Divide the numerator by the denominator: 0.0475 / 0.095 = 0.5. So the probability is 50%.
Explain that despite 95% accuracy, only half of flagged users are actually bad due to the low base rate. Discuss implications for precision and potential improvements.
AI-generated suggestions, not part of the candidate's original notes. May be inaccurate — verify before relying on them.