- A
Increase the model's precision by raising the classification threshold
Why wrong: Raising the threshold would likely decrease recall, increasing false negatives and cost.
- B
Use a different algorithm that trades off recall for precision
Why wrong: Trading recall for precision would hurt the goal of reducing false negatives.
- C
Add more features to the model without changing the threshold
Why wrong: Adding features may or may not improve recall; it is not a direct lever and might not reduce false negatives efficiently.
- D
Increase the model's recall by lowering the classification threshold
Lowering the threshold captures more positives, improving recall and reducing the most costly errors (false negatives).
AIF-C01 AI and ML Fundamentals Practice Question
This AIF-C01 practice question tests your understanding of ai and ml fundamentals. Read the scenario carefully and evaluate each option against the stated constraints before committing to an answer. After answering, compare your reasoning against the explanation and wrong-answer breakdown below. Once you have made your selection, read the full explanation to reinforce the concept and understand why each distractor is designed to mislead on exam day.
A company is building a model to predict loan default. They have historical data with 5% default rate. The model must minimize false negatives (missed defaults) because each default costs $50,000. False positives (incorrectly flagged defaults) cost $500 in customer service time. The model currently has a recall of 0.70 and precision of 0.80. Which of the following actions would MOST likely reduce the total cost?
Clue words in this question
Noticing these words before you look at the options changes how you read each choice.
Clue:
"most likely"Why it matters: Probability qualifier — the question wants the most probable cause or outcome, not a guaranteed one. Eliminate low-probability options.
Clue:
"minimum / minimize"Why it matters: Asks for the least resource use — fewest addresses, smallest subnet, lowest overhead. Eliminate over-provisioned options even if they would technically work.
Answer choices
Why each option matters
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
Increase the model's recall by lowering the classification threshold
The cost of a false negative ($50,000) is 100 times greater than a false positive ($500). Lowering the classification threshold increases recall (reduces false negatives) at the expense of precision (increases false positives). Given the extreme cost asymmetry, the net expected cost will decrease even if many more false positives occur, because each additional true positive saves $50,000 while each extra false positive costs only $500. Option D directly increases recall, which is the correct lever for this cost structure.
Key principle: Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
Increase the model's precision by raising the classification threshold
Why it's wrong here
Raising the threshold would likely decrease recall, increasing false negatives and cost.
- ✗
Use a different algorithm that trades off recall for precision
Why it's wrong here
Trading recall for precision would hurt the goal of reducing false negatives.
- ✗
Add more features to the model without changing the threshold
Why it's wrong here
Adding features may or may not improve recall; it is not a direct lever and might not reduce false negatives efficiently.
- ✓
Increase the model's recall by lowering the classification threshold
Why this is correct
Lowering the threshold captures more positives, improving recall and reducing the most costly errors (false negatives).
Clue confirmation
The clue words "most likely", "minimum / minimize" in the question point toward this answer.
Related concept
Read the scenario before looking for a memorised answer.
Common exam traps
Common exam trap: answer the scenario, not the keyword
AWS often tests the misconception that higher precision is always better, but in cost-sensitive scenarios with asymmetric costs, maximizing recall (even at the cost of precision) is the correct strategy to minimize total financial loss.
Detailed technical explanation
How to think about this question
The classification threshold determines the decision boundary for probability scores. Lowering the threshold makes the model more sensitive, capturing more positive cases (higher recall) but also increasing false positives (lower precision). In cost-sensitive learning, the optimal threshold is found by minimizing the expected cost: threshold = cost_FN / (cost_FN + cost_FP). Here, cost_FN = $50,000 and cost_FP = $500, giving an optimal threshold of 50,000 / 50,500 ≈ 0.99, meaning the model should classify a case as default only if the predicted probability exceeds 99%—but that would maximize recall at the expense of precision, consistent with lowering the threshold from a typical 0.5 to a much lower value to avoid missing defaults.
KKey Concepts to Remember
- Read the scenario before looking for a memorised answer.
- Find the constraint that changes the correct option.
- Eliminate answers that are true in general but not in this case.
TExam Day Tips
- Watch for words such as best, first, most likely and least administrative effort.
- Review why wrong options are wrong, not only why the correct option is correct.
Key takeaway
Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Real-world example
How this comes up in practice
A startup's cloud architect reviews their monthly bill and notices costs are higher than expected for a long-running batch job. Switching from on-demand instances to Reserved Instances — or using Spot/Preemptible VMs — can reduce compute costs by up to 72 %. Questions like this test whether you understand the tradeoffs between commitment, flexibility, and cost across cloud pricing models.
What to study next
Got this wrong? Here's your next step.
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FAQ
Questions learners often ask
What does this AIF-C01 question test?
AI and ML Fundamentals — This question tests AI and ML Fundamentals — Read the scenario before looking for a memorised answer..
What is the correct answer to this question?
The correct answer is: Increase the model's recall by lowering the classification threshold — The cost of a false negative ($50,000) is 100 times greater than a false positive ($500). Lowering the classification threshold increases recall (reduces false negatives) at the expense of precision (increases false positives). Given the extreme cost asymmetry, the net expected cost will decrease even if many more false positives occur, because each additional true positive saves $50,000 while each extra false positive costs only $500. Option D directly increases recall, which is the correct lever for this cost structure.
What should I do if I get this AIF-C01 question wrong?
Identify which exam domain this question belongs to, review the core concept, then practise similar questions from the same domain.
Are there clue words in this question I should notice?
Yes — watch for: "most likely", "minimum / minimize". Probability qualifier — the question wants the most probable cause or outcome, not a guaranteed one. Eliminate low-probability options.
What is the key concept behind this question?
Read the scenario before looking for a memorised answer.
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Last reviewed: Jul 4, 2026
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