CompTIA DataX (DY0-001) — Question 52

A data scientist uses a large data set to build multiple linear regression models to predict the likely market value of a real estate property. The selected new model has an RMSE of 995 on the holdout set and an adjusted R2 of .75. The benchmark model has an RMSE of 1,000 on the holdout set. Which of the following is the best business statement regarding the new model?

Answer options

• A. The model should be deployed because it has a lower RMSE.
• B. The model's adjusted R2 is exceptionally strong for such a complex relationship.
• C. The model fails to improve meaningfully on the benchmark model.
• D. The model's adjusted R2 is too low for the real estate industry.

Correct answer: C

Explanation

The correct answer is C because the new model's RMSE is only slightly better than the benchmark model's RMSE, indicating minimal improvement. While the lower RMSE is a positive aspect, it does not justify the deployment if the performance gain is not meaningful. Options A and B overstate the model's advantages, while D inaccurately critiques the adjusted R2 value without considering context.