You Work for a Bank

question 3

Multiple Choice

You work for a bank. You have a labelled dataset that contains information on already granted loan application and whether these applications have been defaulted. You have been asked to train a model to predict default rates for credit applicants. What should you do?

• A) Increase the size of the dataset by collecting additional data.
• B) Train a linear regression to predict a credit default risk score.
• C) Remove the bias from the data and collect applications that have been declined loans.
• D) Match loan applicants with their social profiles to enable feature engineering.

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Definitions:

Objective Measurement

The process of quantifying variables via methods that minimize bias and subjectivity, ensuring that results are not influenced by personal feelings or opinions.

Basic Research

Pure science that aims to increase the scientific knowledge base.

Applied Research

Research aimed at finding a solution for a real-world problem rather than acquiring knowledge for knowledge's sake.

Knowledge Base

A structured repository of information, often used in AI and customer support, that enables the retrieval of knowledge.