AI-900: Understanding Machine Learning Types: Classification, Regression, and Clustering

Discover the different types of machine learning, including classification, regression, and clustering. Learn how a banking system that predicts loan repayment falls under the classification type of machine learning. Explore the world of artificial intelligence and its applications in the financial sector.

Question

A banking system that predicts whether a loan will be repaid is an example of the __________ type of machine learning.

A. Classification
B. Regression
C. Clustering

Answer

A. Classification

Explanation

The correct answer is A. Classification.

Classification is a type of machine learning that assigns labels to data points based on some criteria. For example, a classification model can predict whether an email is spam or not, based on the sender, subject, and content of the email. Similarly, a classification model can predict whether a loan will be repaid or not, based on the borrower’s credit history, income, and other factors.

Regression is a type of machine learning that predicts a continuous numerical value based on the input data. For example, a regression model can predict the price of a house based on its size, location, and features. Regression models are not suitable for predicting categorical outcomes, such as yes or no, or repaid or not.

Clustering is a type of machine learning that groups data points based on their similarity or proximity. For example, a clustering model can segment customers based on their demographics, preferences, and behavior. Clustering models do not make predictions, but rather discover patterns and structures in the data.

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