Question 61 · 364 in bank
You work for a bank and are building a random forest model for fraud detection. You have a dataset that includes transactions, of which 1% are identified as fraudulent. Which data transformation strategy would likely improve the performance of your classifier?
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Answer: C
Explanation
The answer is C beacause it's the only way to improve model performance. Box-Cox transformation: transform feature values according to normal distribution Z-normalization: transform feature values according to x_new = (x – μ) / σ (so {x_new} have mean 0 and std dev 1) Log transform: just log transformation Also, the Random Forest algorithm is not a distance-based model but it is a tree-based model, there's no need of normalization process.
Source: Adapted from community discussion — Scipione_