Discover how automated machine learning creates a binary classification model for categorizing loan applications. Explore risk assessment based on loan characteristics efficiently!
Table of Contents
Question
A bank wants to use historic loan repayment records to categorize loan applications as low-risk or high-risk based on characteristics like the loan amount, the income of the borrower, and the loan period. What kind of machine learning model should the bank use automated machine learning to create?
Answer
Classification
Explanation
For categorizing loan applications into low-risk or high-risk based on various characteristics, the bank should employ a binary classification model using automated machine learning. This model will analyze historic loan repayment data and predict whether new loan applications fall into the low-risk or high-risk category based on features like loan amount, borrower’s income, and loan period.
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