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CS Professional · Artificial Intelligence, Data Analytics and Cyber Security - Laws and Practice · Internet and Other Technologies

A fintech firm in Bengaluru trains a model on historical loan records where each applicant is already labelled 'defaulted' or 'repaid', so that it can predict the outcome for new applicants. Which machine learning approach is this?

This is supervised learning. The training records already carry labels of defaulted or repaid, and the model learns to predict those labels for new applicants. Unsupervised learning would instead look for hidden groupings in unlabelled data.

  1. AUnsupervised learning, because the model finds groups on its own
  2. BSupervised learning, because the training data carries known labelsCorrect
  3. CReinforcement learning, because the model earns rewards from a loan officer
  4. DTransfer learning, because the model is copied from a bank

Explanation

Supervised learning uses labelled examples to learn a mapping to known outcomes, here a classification of default or repayment. Unsupervised learning works on unlabelled data to find patterns such as clusters, so it does not fit.

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