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AI0-001 Implementing AI Solutions Practice Question

A data science team is developing a churn prediction model. Which TWO data preparation best practices are MOST important to prevent overfitting and ensure generalization?

Answer choices

Why each option matters

Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.

Correct answer & explanation

Split data into training and test sets before any preprocessing

Splitting data before any preprocessing prevents leakage from test set into training. Cross-validation provides a more robust estimate of generalization than a single hold-out set.

Answer analysis

Option-by-option breakdown

For each option: why learners choose it and why it is or isn't the right answer here.

  • Split data into training and test sets before any preprocessing

    Why this is correct

    Splitting first avoids leaking test information into scaling or imputation.

  • Normalize all features using the entire dataset's statistics

    Why it's wrong here

    Normalization should be fit on training data only; using entire dataset leaks test information.

  • Use cross-validation to tune hyperparameters

    Why this is correct

    Cross-validation reduces variance in performance estimates and helps avoid overfitting to a particular split.

  • Remove outliers based on the full dataset distribution

    Why it's wrong here

    Outlier removal decisions should be made on training data to avoid leakage.

  • Encode categorical variables with target encoding on the full dataset

    Why it's wrong here

    Target encoding on full dataset leaks target information from test into training.

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