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AI Associate AI Fundamentals Practice Question

A model predicts customer lifetime value with high precision but low recall on high-value customers. What is the business impact?

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

Many false negatives for high-value customers

Low recall means many high-value customers are missed, leading to lost opportunities to retain them.

Answer analysis

Option-by-option breakdown

For each option: why learners choose it and why it is or isn't the right answer here.

  • Many false negatives for high-value customers

    Why this is correct

    Low recall means the model fails to identify many actual high-value customers.

  • The model is overfitted

    Why it's wrong here

    Overfitting is not directly indicated by precision/recall trade-off.

  • Many false positives for high-value customers

    Why it's wrong here

    Low recall indicates many false negatives, not positives.

  • High accuracy on low-value customers

    Why it's wrong here

    The scenario describes precision and recall for high-value customers, not accuracy.

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