AI0-001 Implementing AI Solutions Practice Question
A data science team is building a model to detect fraudulent transactions. They have a dataset of 1 million normal transactions and 1,000 fraudulent ones. What is the MOST effective data preparation step to handle this imbalance?
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
✓
Apply SMOTE to generate synthetic fraudulent transactions and randomly undersample normal transactions
Combining oversampling of the minority class (e.g., SMOTE) with undersampling of the majority class is a common and effective approach to balance the dataset.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
Delete all normal transactions until the dataset is balanced
Why it's wrong here
Deleting most normal transactions discards valuable information and may hurt model performance.
- ✗
Duplicate the fraudulent transactions 1,000 times
Why it's wrong here
Duplicating the same records leads to overfitting; SMOTE generates synthetic variations that improve generalization.
- ✓
Apply SMOTE to generate synthetic fraudulent transactions and randomly undersample normal transactions
Why this is correct
SMOTE creates synthetic fraud samples, and undersampling reduces the majority class, creating a more balanced dataset.
- ✗
Train the model on the original dataset; class imbalance does not affect model performance
Why it's wrong here
Class imbalance typically biases the model toward the majority class, leading to poor fraud detection.
About these practice questions
This AI0-001 question is part of Courseiva's 754-question bank — original exam-style content with full explanations and wrong-answer analysis, never real exam questions or exam dumps. Learn why practice questions differ from exam dumps →
JA
Written by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
This AI0-001 practice question is part of Courseiva's free CompTIA certification practice question bank. Courseiva provides original exam-style practice questions with explanations, topic-based practice, mock exams, readiness tracking, and study analytics to help learners prepare for the AI0-001 exam.