An organization uses a spam filtering software to block emai

An organization uses a spam filtering software to block email messages that may potentially be spam messages. The spam filter can be set to one of two security modes: High-Security-Mode () or Low-Security-Mode ().

Extensive evaluation using a benchmark corpus consisting exclusively of spam messages yields the following performance statistics for the spam filter:

96% of the spam messages are blocked in the High-Security-Mode.

90% of the spam messages are blocked in the Low-Security-Mode.

Extensive evaluation using a benchmark corpus consisting exclusively of non-spam (legitimate) messages yields the following performance statistics for the spam filter:

10% of the non-spam messages are blocked in the High-Security-Mode

4% of the non-spam messages are blocked in the Low-Security-Mode

The organization estimates that 80% of the messages that it receives are spam messages.

* If the cost of not blocking a spam message is $1 and the cost of blocking a non-spam message is $10, should the organization operate the spam filter in the High-Security-Mode? Why?

* Recall that the cost of not blocking a spam message is $1. At least how high should the cost of blocking a non-spam message be for a risk-neutral rational decision maker to prefer operating the spam filter in the Low-Security-Mode?

* Let be the amortized cost per message of operating the spam filter. Write a short memo the CIO of the organization explaining at most how high could be for the organization to use the spam filter with the specified performance?

Solution

1) Organization estimates that the 80% of messages received as spam messages, out of that 96% of the spam messages are blocked in the High Security Mode during in the evaluation time, and 10% of the non spam messages are blocked in the High Security Mode.

No, they should not operate the spam filter in the High Security Mode because the reason is

a) High Cost:

Cost of blocking a non spam message is $10, considered to be high and blocked percentage 10% which is higher than Low Security Mode.

b) Important mail considered as spam:

As per organization estimates   getting only 20% emails are not as spam message, higher mode blocked such valid emails is 10% so high. Organization can loose any important email blocked by higher mode.

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During in the Low Security Mode

Organization mainly used a software to blocking spam emails, as per Low Security Mode it is blocking only 90% when we compare to high mode, it gives low percentage, even though it is blocking non spam message at the rate of 4% which is very low to high mode.

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To: CIO

From : ZZZ

Subject : Explaining about spam filter performance

Date: mm/dd/yy

Purpose:

Purpose of my memo explaining performance of spam filter between in the high mode and low mode

as per my opinion, we can operate through low mode because non spam blocking percentage is very low.

we cannot loose any important as well as valuable emails by selecting higher mode. If higher mode not blocking a spam message percentage is in high 96% little bit higher of lower mode having 90% a difference of 6%.

I strongly recommend to use the spam filter as low mode.

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