You're trying to predict whether it will rain on the day of your child's birthday party. The party is at a park. If it doesn't rain, then you can sit in the grass to eat. If it does rain, sitting in the grass will be very unpleasant, and you'd prefer to sit at the sheltered tables. But, the shelter costs $100 to reserve, and you have to decide 1 week ahead you can't just wait to see the actual weather before deciding. Assume you can't use the shelter if you don't reserve it. You quantify your loss in different scenarios as the loss function L(y, g), where y=1 if it actually rains and y=0 if not, and g is your guess: L(1,1)=L(0,0)=0, and L(0,1)=100, L(1,0)=500. Let P(Y=1)=0.1. Then, your optimal prediction is g=