AWS Certified AI Practitioner (AIF-C01) — Question 312

A company is analyzing financial transaction records. The company categorizes the records as either personal or business. The company inserts the categories into the transaction records.

Which data preparation step does this describe?

Answer options

• A. Data encoding
• B. Data labeling
• C. Data normalization
• D. Data balancing

Correct answer: B

Explanation

Adding a category tag like 'personal' or 'business' to raw transaction records is a classic example of data labeling, which provides the ground truth tags required for supervised machine learning. Data encoding converts data formats, data normalization scales numeric values to a standard range, and data balancing adjusts class distributions, none of which describe assigning category tags to raw records.