AI Associate AI Fundamentals Practice Question
A team trains a model to predict customer lifetime value (CLV) using CRM data. The model's predictions are way off for new customers who have only been with the company for a month. Which factor is MOST likely contributing to this issue?
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
✓
The model is overfitting to customers with long purchase histories
The model likely overfits to patterns from customers with longer histories, and new customers have limited features. Underfitting would cause overall poor performance. Data leakage might give unrealistic information. High precision doesn't cause inaccurate predictions.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
The model has high precision but low recall
Why it's wrong here
Precision and recall are classification metrics; CLV prediction is regression.
- ✓
The model is overfitting to customers with long purchase histories
Why this is correct
Overfitting can cause the model to rely on patterns that only appear in long-term data, leading to poor predictions for new customers with short histories.
- ✗
The model is underfitting
Why it's wrong here
Underfitting would show poor performance across all segments, not just new customers.
- ✗
The training data includes future transactions (data leakage)
Why it's wrong here
Data leakage would cause overly optimistic predictions, not necessarily off predictions for new customers.
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Written by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
This AI Associate practice question is part of Courseiva's free Salesforce 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 AI Associate exam.