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Suppose that a credit card company charges 2% fees for each transaction (deducted from the payment to payee). How can I estimate the expected potential
Suppose that a credit card company charges 2% fees for each transaction (deducted from the payment to payee).
How can I estimate the expected potential loss of a fraudulent transaction?
How can I estimate the expected profit from a genuine transaction?
Let denote the probability that a transaction is fraud. What is the minimum value of to declare 'Fraud' in order to ensure that the expected profit from a single transaction is non-negative?
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