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DEPARTMENT OF INFORMATION TECHNOLOGY

Academic Year: 2024-25 (Even Semester)
QUESTION BANK
Course Code & Name: AD3491-Fundamentals of Data Science and Analytics
Name of the Faculty member: Mrs.R.Poornima Priyanka

UNIT V- PREDICTIVE ANALYTICS

Part A

1. What is Predictive Analytics?

The term predictive analytics refers to the use of statistics and modeling techniques to
make predictions about future outcomes and performance. Predictive analytics looks at
current and historical data patterns to determine if those patterns are likely to emerge
again. This allows businesses and investors to adjust where they use their resources to
take advantage of possible future events. Predictive analysis can also be used to improve
operational efficiencies and reduce risk

2. Define Predictive Analytics.

Predictive analytics is a form of technology that makes predictions about certain
unknowns in the future. It draws on a series of techniques to make these determinations,
including artificial intelligence (AI), data mining, machine learning, modeling, and
statistics.3 For instance, data mining involves the analysis of large sets of data to detect
patterns from it. Text analysis does the same, except for large blocks of text

3. What are the areas of applications can predictive models be applied?

 Weather forecasts
 Creating video games
 Translating voice to text for mobile phone messaging
 Customer service
 Investment portfolio development

4. What is mean by Forecasting?
Forecasting is essential in manufacturing because it ensures the optimal utilization of
resources in a supply chain. Critical spokes of the supply chain wheel, whether it is
inventory management or the shop floor, require accurate forecasts for functioning.
Predictive modelling is often used to clean and optimize the quality of data used for such
forecasts. Modelling ensures that more data can be ingested by the system, including
from customer-facing operations, to ensure a more accurate forecast

5. Define Credit
Credit scoring makes extensive use of predictive analytics. When a consumer or
business applies for credit, data on the applicant's credit history and the credit record of
borrowers with similar characteristics are used to predict the risk that the applicant might
fail to perform on any credit extended.

6. Define Underwriting
Data and predictive analytics play an important role in underwriting. Insurance
companies examine policy applicants to determine the likelihood of having to pay out
for a future claim based on the current risk pool of similar policyholders, as well as past
events that have resulted in pay-outs. Predictive models that consider characteristics in
comparison to data about past policyholders and claims are routinely used by actuaries.
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7. What is mean by Marketing?

Individuals who work in this field look at how consumers have reacted to the overall
economy when planning on a new campaign. They can use these shifts in demographics
to determine if the current mix of products will tice consumers to make a purchase.
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Active traders, meanwhile, look at a variety of metrics based on past events when
deciding whether to buy or sell a security. Moving averages, bands, and breakpoints are
based on historical data and are used to forecast future price movements

8. Compare Predictive Analytics vs. Machine Learning

A common misconception is that predictive analytics and machine learning are the same
things. Predictive analytics help us understand possible future occurrences by analyzing
the past. At its core, predictive analytics includes a series of statistical techniques
(including machine learning, predictive modelling, and data mining) and uses statistics
(both historical and current) to estimate, or predict, future outcomes

9. What is the Decision Trees?

If you want to understand what leads to someone's decisions, then you may find decision
trees useful. This type of model places data into different sections based on certain
variables, such as price or market capitalization. Just as the name implies, it looks like a
tree with individual branches and leaves. Branches indicate the choices available while
individual leaves represent a particular decision
Decision trees are the simplest models because they're easy to understand and dissect.
They're also very useful when you need to make a decision in a short period of time

10. Define Regression

This is the model that is used the most in statistical analysis. Use it when you want to
determine patterns in large sets of data and when there's a linear relationship between the
inputs. This method works by figuring out a formula, which represents the relationship
between all the inputs found in the dataset. For example, you can use regression to figure
out how price and other key factors can shape the performance of a security

11. Define Neural Networks

Neural networks were developed as a form of predictive analytics by imitating the way
the human brain works. This model can deal with complex data relationships using
artificial intelligence and pattern recognition. Use it if you have several hurdles that you
need to overcome like when you have too much data on hand, when you don't have the
formula you need to help you find a relationship between the inputs and outputs in your
dataset, or when you need to make predictions rather than come up with explanations

12. What are the Benefits of Predictive Analytics?

There are numerous benefits to using predictive analysis. As mentioned above, using
this type of analysis can help entities when you need to make predictions about
outcomes when there are no other (and obvious) answers available

Investors, financial professionals, and business leaders are able to use models to help
reduce risk. For instance, an investor and their advisor can use certain models to help
craft an investment portfolio with minimal risk to the investor by taking certain factors
into consideration, such as age, capital, and goals.

There is a significant impact to cost reduction when models are used. Businesses can
determine the likelihood of success or failure of a product before it launches. Or they
can set aside capital for production improvements by using predictive techniques before
the manufacturing process begins

13. What are the criticisms of Predictive Analysis.

The use of predictive analytics has been criticized and, in some cases, legally restricted
due to perceived inequities in its outcomes. Most commonly, this involves predictive
models that result in statistical discrimination against racial or ethnic groups in areas
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such as credit scoring, home lending, employment, or risk of criminal behaviour.

A famous example of this is the (now illegal) practice of redlining in home lending by
banks. Regardless of whether the predictions drawn from the use of such analytics are

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accurate, their use is generally frowned upon, and data that explicitly include
information such as a person's race are now often excluded from predictive analytics
14. How Does Netflix Use Predictive Analytics?
Data collection is very important to a company like Netflix. It collects data from its
customers based on their behaviour and past viewing patterns. It uses information and
makes predictions based to make recommendations based on their preferences. This is
the basis behind the "Because you watched..." lists you'll find on your subscription.

15. What is Data Analytics?

Data analytics is the science of analysing raw data to make conclusions about that
information. Many of the techniques and processes of data analytics have been
automated into mechanical processes and algorithms that work over raw data for human
consumption

16. Why do we need Goodness of Fit? (APRIL/MAY 2023)

Goodness-of-Fit is a statistical hypothesis test used to see how closely observed data
mirrors expected data. Goodness-of-Fit tests can help determine if a sample follows a
normal distribution, if categorical variables are related, or if random samples are from
the same distribution.

17. What is survival analysis? (APRIL/MAY 2023)

Survival analysis is a collection of statistical procedures for data analysis where the
outcome variable of interest is time until an event occurs. Because of censoring–the non
observation of the event of interest after a period of follow-up–a proportion of the
survival times of interest will often be unknown.

18. Specify the importance of exponentially weighted moving average

The Exponentially Weighted Moving Average (EWMA) is a statistic for monitoring the
process that averages the data in a way that gives less and less weight to data as they are
further removed in time. An EMA does serve to alleviate the negative impact of lags to
some extent. Because the EMA calculation places more weight on the latest data, it
“hugs” the price action a bit more tightly and reacts more quickly. This is desirable
when an EMA is used to derive a trading entry signal.

19. What is Time series analysis?

Time series analysis is a specific way of analyzing a sequence of data points collected
over an interval of time. In time series analysis, analysts record data points at consistent
intervals over a set period of time rather than just recording the data points intermittently
or randomly.

20. State the use of auto correlation in time series analysis

Autocorrelation represents the degree of similarity between a given time series and a
lagged version of itself over successive time intervals. Autocorrelation measures the
relationship between a variable's current value and its past values.

21. State the difference between Exponentially Weighted Moving average and Moving
average in Time series analysis
SMA calculates the average price over a specific period, while WMA gives more weight
to current data. EMA is also weighted toward the most recent prices, but the rate of
decrease between one price and its preceding price is not consistent but exponential.

22. What are the various steps of Data Analysis?

The process involved in data analysis involves several different steps:
 The first step is to determine the data requirements or how the data is grouped. Data
may be separated by age, demographic, income, or gender. Data values may be
numerical or be divided by category.
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 The second step in data analytics is the process of collecting it. This can be done
through a variety of sources such as computers, online sources, cameras,
environmental sources, or through personnel.
 Once the data is collected, it must be organized so it can be analyzed. This may take
place on a spreadsheet or other form of software that can take statistical data.
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o The data is then cleaned up before analysis. This means it is scrubbed and checked
to ensure there is no duplication or error, and that it is not incomplete. This step
helps correct any errors before it goes on to a data analyst to be analyzed
Part B
1. How do you solve the least square problem in Python? What is least square method
in Python?
2. What is the goodness-of-fit test?
3. One study indicates that the number of televisions that American families have is
distributed (this is the given distribution for the American population) as in the
table.
Number of Televisions Percent
0 10
1 16
2 55
3 11
4+ 8
The table contains expected (E) percents.
A random sample of 600 families in the far western United States resulted in the
data in this table.
Number of Televisions Frequency
0 66
1 119
2 340
3 60
4+ 15
Total 600
The table contains observed (O) frequency values.
At the 1% significance level, does it appear that the distribution “number of
televisions” of far western United States families is different from the distribution
for the American populations a whole?
4. Explain in detail about time series analysis with example.
5. Describe Regression using Stats Models
6. Explain multiple regression with an example
7. What is the nonlinear relationships and types .Difference between linear and non
linear relationship
8. Describe logistic regression in detail
9. Explain in detail serial correlation and auto correlation
10. Describe in detail Introduction to survival analysis
11. Consider an example, Sam found how many hours of sunshine vs how many ice
creams were sold at the shop from Monday to Friday is given in the following table.
Hours of
Ice cream Sold
Sunshine

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 3 5
5 7
7 10
9 15
Explain the concept of least squares regression to find the line of best fit for the above data
and sam would like to find the how many no of ice cream would sold if he hears the
weather forecast which says “We expect 8 hours of sun tomorrow” using linear regression
model
12. Describe in detail about logistic regression model in predictive analysis.
13. Exemplify in detail about multiple regression models with example
14. Explain in depth about Time series analysis and its technique with relevant examples
15. Explain multiple linear regression model with the prediction of sales through the various
attributes like budget for TV advertisement, Radio Advertisement and News paper
Advertisement using statistical model.
16. How is to test linear model? Explain in detail about the role of weighted resample in linear
model testing
17. Explain linear least square predictive analysis with an example.
18. Explain in detail about TSA with an example