Question 1 · choose 1
A retail bank trained a fraud model last quarter on two years of labeled card transactions. Since launch, the model scores every new card payment within milliseconds and flags suspicious ones for review. The program sponsor asks what to call the step the model performs on each new payment so that the budget line for it is named correctly. What is that step?
- ATraining, because the model updates its parameters every time it scores a new payment
- BData preprocessing, because each payment must be cleaned before it is scored
- CInference, which applies the trained model to new payments it has never seen
- DModel evaluation, because each score is tested against validation data
Show the answer and why
ATraining, because the model updates its parameters every time it scores a new payment
Incorrect
Training is the phase in which the algorithm learns patterns from historical examples and adjusts its parameters. Scoring a payment does not change the model; it uses the parameters it already has.
BData preprocessing, because each payment must be cleaned before it is scored
Incorrect
Preprocessing cleans and transforms raw data, mainly to prepare it for training. It is not the step in which the model produces a fraud score.
CInference, which applies the trained model to new payments it has never seen
Correct
Inference is the process of a trained model generating an output, here a fraud score, from a new input. It is the recurring production cost of a model, separate from the one-time training effort.
DModel evaluation, because each score is tested against validation data
Incorrect
Evaluation measures how well a model generalizes by testing it on a separate validation dataset before or after release. Scoring live payments is not evaluation; the true outcome is not known yet.
Training is where a model learns from historical data; inference is where the trained model is used to produce predictions on new data. A fraud model that scores each live payment is performing inference, which is why inference volume, not training, drives most of the ongoing cost of a model in production.
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