Skip to content

CS Professional · Artificial Intelligence, Data Analytics and Cyber Security - Laws and Practice · Data Analytics and Law

A fintech company in Pune runs a model on customer transaction data to estimate which borrowers are likely to default next quarter, and then recommends a revised credit limit for each borrower. Which pairing of analytics types correctly describes the two steps?

Estimating likely future defaults is predictive analytics because it forecasts outcomes from existing data, while recommending a revised credit limit for each borrower is prescriptive analytics because it advises the action to take. The other pairings use descriptive or diagnostic types, which look only at past data.

  1. ADescriptive for the estimate, diagnostic for the recommendation
  2. BPrescriptive for the estimate, predictive for the recommendation
  3. CPredictive for the estimate, prescriptive for the recommendationCorrect
  4. DDiagnostic for the estimate, descriptive for the recommendation

Explanation

Estimating the likelihood of future default is forecasting, which is predictive analytics. Suggesting a revised credit limit is recommending an action, which is prescriptive analytics. The other pairings reverse the roles or use backward-looking types that do not forecast.

Did you get it right without looking?

One question tells you little. A timed set on Data Analytics and Law shows your real accuracy, how long you take and where you lose marks.

Practise Data Analytics and LawFree diagnostic mock

More Data Analytics and Law questions