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.
Table of Contents
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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