hard · FRM Part 1 Quantitative Analysis
An analyst is using a k-nearest neighbors (kNN) algorithm to classify credit defaults.
If k is set to a very low value (e.g., k=1), what is the likely impact on the model's performance?
- Increased computational efficiency during the training phase.
- The model becomes equivalent to a linear regression.
- Low bias and high variance (overfitting).
- High bias and low variance.
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