Determine which of the following statements is/are true about clustering methods:

• If K is held constant, K-means clustering will always produce the same cluster assignments.
• Given a linkage and a dissimilarity measure, hierarchical clustering will always produce the same cluster assignments for a specific number of clusters.
• Given identical data sets, cutting a dendrogram to obtain five clusters produces the same cluster assignments as K-means clustering with K = 5.

• I only
• II only
• III only
• I, II and III
• The correct answer is not given by (A), (B), (C), or (D).

Copyright 2023. The Society of Actuaries, Schaumburg, Illinois. Reproduced with permission.

Key: B

I is false. K-means clustering is subject to the random initial assignment of clusters.

II is true. Hierarchical clustering is deterministic, not requiring a random initial assignment.

III is false. The two methods differ in their approaches and hence may not yield the same clusters.

Copyright 2023. The Society of Actuaries, Schaumburg, Illinois. Reproduced with permission.