- CFA Exams
- CFA Exam: Level II 2021
- Study Session 3. Quantitative Methods (2)
- Reading 7. Machine Learning
- Subject 1. What is machine learning?

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**CFA Practice Question**

Which statement is false regarding statistical modelling and machine learning?

B. They have different assumptions and techniques when analyzing underlying observations. Statistics draws population inferences from a sample, and machine learning finds generalizable predictive patterns.

C. Statistical modelling is a better model when dealing with high dimensionality, while machine learning is a better one with a high degree of non-linearity.

A. They both share the same goal: learning from data.

B. They have different assumptions and techniques when analyzing underlying observations. Statistics draws population inferences from a sample, and machine learning finds generalizable predictive patterns.

C. Statistical modelling is a better model when dealing with high dimensionality, while machine learning is a better one with a high degree of non-linearity.

Correct Answer: C

Machine Learning builds heavily on statistics. Both machine learning and statistics focus on drawing knowledge or insights from the data. Statistical Modelling is formalization of relationships between variables in the form of mathematical equations. Machine Learning is an algorithm that can learn from data without relying on rules-based programming. It is a better approach to handle problems with many variables or with a high degree of non-linearity.

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