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      Question

      A bank analyses transaction history to identify

      customers likely to need a pre-approved personal loan. This is an example of:
      A Descriptive analytics Correct Answer Incorrect Answer
      B Predictive analytics Correct Answer Incorrect Answer
      C Diagnostic analytics Correct Answer Incorrect Answer
      D Observational research Correct Answer Incorrect Answer
      E Secondary research Correct Answer Incorrect Answer

      Solution

      Predictive analytics uses historical data to forecast future behaviour, such as loan demand probability. Why others are incorrect: Descriptive summarizes past data; Diagnostic explains why something happened; Observational research involves watching behaviour; Secondary research uses already published data. Banking Example: Algorithm identifying customers with rising credit card usage and offering instant loans.

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