A model that identifies fraudulent transactions reports 99.4 per cent accuracy. Fraud accounts for roughly one transaction in two hundred. The fraud team says the model has caught almost nothing. What is the most likely explanation?

• AAccuracy is misleading on imbalanced data, and the model may be predicting the majority class almost every time.
• BThe model is overfitted, so it performs well on the test set and badly in production.
• CThe test set was too small for the accuracy figure to be reliable.
• DThe model needs a higher learning rate so that it converges on the rare class.