What is the probability that it is actually fraudulent


Problem: Suppose that 3% of transactions on eBay are fraudulent. The payment processing team has decided to try to crack down on scammers, so they've put into place a fraud detection system. However, the system is not always perfect. It correctly identifies 90% of fraudulent transactions but also incorrectly flags 4% of legitimate transactions as fraudulent. If a transaction is flagged as fraudulent, what is the probability that it is actually fraudulent?

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Accounting Basics: What is the probability that it is actually fraudulent
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