In the K-Nearest Neighbors Method, When the Value of K

question 35

Multiple Choice

In the k-nearest neighbors method, when the value of k is set to 1

• A)the classification or prediction of a new observation is based solely on the single most similar observation from the training set.
• B)the new observation's class is naïvely assigned to the most common class in the training set.
• C)the new observation's prediction is used to estimate the anticipated error rate on future data over the entire training set.
• D)the classification or prediction of a new observation is subject to the smallest possible classification error.

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Definitions:

Nominal Interest Rate

The interest rate stated on a loan or investment agreement, without adjustment for inflation.

After-tax Real Interest Rate

The interest rate received by lenders or paid by borrowers, adjusted for inflation and taxes, that reflects the true cost of borrowing or real yield on savings.

Inflation Rate

The speed at which the overall price level of goods and services increases, diminishing the buying power progressively.

Deflation

A decrease in the general price level of goods and services, often indicating a contraction in the supply of money and credit in an economy.