The image below shows the penalty error matrix that can be used in Trees Outcome
ID: 3726370 • Letter: T
Question
The image below shows the penalty error matrix that can be used in Trees Outcome 6 0 We can interpret this matrix as follows. Suppose the actual outcome for an observation is 3, and we predict 2. We find 3 on the top of the matrix, and go down to the second row (since we forecasted 2) The penalty error for this mistake is 2. If for another observation we predict (forecast) 4, but the actual outcome is 1, that is a penalty error of 3 What is the worst mistake we can make, according to the penalty error matrix? b) We predict 5 (very high cost), but the actual outcome is 5 (very high cost) O c) We predict 1 (very low cost), but the actual outcome is 5 (very high cost). O d) We predict 1 (very low cost), but the actual outcome is 1 (very low cost) O a) We predict 5 (very high cost),but the actual outcome is 1 (very low cost) Show transcribed image textExplanation / Answer
Answer: c) We predict 1(very low cost), but the actual outcome is 5(very high cost)
Explanation:
In the penalty error matrix , the maximum value is 8 which is worst. 8 is in 1st row and 5th column. So if we predict 1 but the actual outcome is 5, that will be the worst mistake.
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