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ACCA Strategic Professional · Advanced Performance Management · Data science and analytics

Brightwave Bank trains a model on five years of loan records, each labelled as 'defaulted' or 'repaid', to predict whether new applicants will default. Which description best fits this task?

This is supervised learning for classification. The model learns from historical records with known labelled outcomes and predicts a category, default or repaid, for new applicants. Clustering and association mining do not use labels, and descriptive reporting does not predict.

  1. AUnsupervised association rule mining
  2. BSupervised learning for classificationCorrect
  3. CClustering of similar applicants
  4. DDescriptive reporting of past defaults

Explanation

The training data includes known labelled outcomes and the target is a category (default or repaid), which is supervised classification. Clustering and association mining do not use labelled outcomes. Descriptive reporting does not predict new cases.

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