Determine whether the following statement is true (T) or false (F).

Data mining is a process of analyzing known patterns in data.

TRUE

FALSE

Artificial intelligence is commonly used in data mining.

TRUE

FALSE

In data mining, patterns found while analyzing data are used for further analyzing the data.

TRUE

FALSE

Data mining is used to detect false insurance claims.

TRUE

FALSE

Data mining is only useful for a limited range of problems.

TRUE

FALSE

DATA MINING Data mining is simply filtering through large amounts of raw data for useful information that gives businesses a competitive edge. This information is made up of meaningful patterns s and trends that are already in the data but were previously unseen. The most popular tool used when mining is artificial intelligence (AI). AI technologies try to work the way the human brain works, by making o intelligent guesses, learning by example, and using deductive reasoning. Some of the more popular AI methods used in data mining include neural networks, clustering, and decision trees. Neural networks look at the rules of using data, 5 which are based on the connections found or on a sample set of data. As a result, the software continually analyses value and compares it to the other factors, and it compares these factors repeatedly until it finds patterns emerging. These 20 patterns are known as rules. The software then looks for other patterns based on these rules or sends out an alarm when a trigger value is hit. Clustering divides data into groups based on similar features or limited data ranges. Clusters s are used when data isn't labelled in a way that is favourable to mining. For instance, an insurance company that wants to find instances of fraud wouldn't have its records labelled as fraudulent or not fraudulent. But after analysing patterns 30 within clusters, the mining software can start to figure out the rules that point to which claims are likely to be false. Decision trees, like clusters, separate the data into subsets and then analyse the subsets to as divide them into further subsets, and so on (for a few more levels). The final subsets are then small enough that the mining process can find interesting patterns and relationships within the data. 4o Once the data to be mined is identified, it should be cleansed. Cleansing data frees it from duplicate information and crroneous data. Next, the data should be stored in a uniform format within relevant categories or fields. Mining tools s can work with all types of data storage, from large data warehouses to smaller desktop databases to flat files. Data warehouses and data