Explanation:
The bank can reduce the fraction of false goods by increasing the cutoff score; and this might be the error bias the bank favors if false goods are more costly than the opportunity cost of false bads.
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Which of the following is a TRUE statement?
A
This cutoff of 680.0 ensures an error rate of less than 1.0%
B
The bank can reduce the fraction of false bads by increasing the cutoff score
C
The bank can reduce the fraction of false goods by increasing the cutoff score
D
The bank can simultaneously reduce the fraction of errors (ie, both false bads and false goods) by increasing the cutoff score