PRODUCTION SCENARIO
A detector flags 50 transactions. Of those, 40 are confirmed fraud. Investigators later find 80 fraudulent transactions in total.
What are its precision and recall?
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Show answer and explanation
Answer: 80% precision and 50% recall
Precision is true positives over everything flagged, 40/50, or 80%. Recall is true positives over all actual positives, 40/80, or 50%. The 50% precision and 80% recall answer swaps the two denominators and so reads the detector as noisy but thorough when it is the opposite. The 80%-and-80% answer reuses the alert denominator for both and hides the 40 frauds that were missed. The 50%-and-50% answer reuses the total-fraud denominator for both and understates how clean the alert queue is.