A financial institution wants to predict whether a loan applicant is likely to default on their loan. They have a mix of numerical data (like income, age) and categorical data (like occupation, marital status). Which algorithm might be well-suited for this task due to its ability to handle both types of data?

  • Decision Tree
  • Random Forest
  • Support Vector Machine
  • k-Nearest Neighbors
The Random Forest algorithm is well-suited for this task because it can handle both numerical and categorical data effectively. It combines multiple decision trees and takes a vote to make predictions, making it robust and accurate for such mixed data.
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