IIBA CBDA IIBA - CBDA Exam Practice Test Instant Access

Question 1

A data scientist is analyzing a dataset to determine if there is a strong relationship between two variables. A measure of covariance is done. Which of the following graphs indicate Zero Covariance between variables?

Answer : C

Covariance measures the directional relationship between the returns on two assets. A positive covariance means that asset returns move together while a negative covariance means they move inversely. Zero covariance indicates that the returns on the two assets move independently of each other. In the context of a scatter plot, zero covariance is represented by a plot where the points do not show any upward or downward trend but are rather scattered randomly on the graph with no discernible pattern.

Graph 4 displays such a pattern where there is no apparent relationship between the variables on the x and y axes, indicating that there is zero covariance between them.

Question 2

Freedom Insurance is planning to offer a new type of insurance policy and would like to determine how to optimally price it. The company seeks to identify the characteristics of this policy that would produce the maximum profit in the coming year. What type of analytics would Freedom Insurance be considering to achieve this objective?

ARetrospective analytics

BDescriptive analytics

CPredictive analytics

DPrescriptive analytics
Explanation:
According to the Guide to Business Data Analytics, prescriptive analytics is a type of analytics that provides recommendations or suggestions for optimal actions or decisions based on data analysis. Prescriptive analytics uses techniques such as optimization, simulation, and decision analysis to evaluate various scenarios and trade-offs and to determine the best course of action for a given objective and constraint. Prescriptive analytics can help organizations achieve their goals, improve their performance, and increase their efficiency and effectiveness. In this situation, Freedom Insurance wants to determine how to optimally price a new type of insurance policy that would produce the maximum profit in the coming year. This is a prescriptive analytics problem, as it involves finding the optimal solution for a complex and uncertain decision problem.

Answer : D

Question 3

An analytics team completed their research to determine why customers are abandoning items in their online shopping cart. The team suggests improvements to the website to address the problem. The Director of Sales proclaims that the current website is fine and indicates that the problem materialized when the company increased its shipping rates. The solution proposed by the team seems misaligned. What has gone wrong?

AThis scenario cannot be addressed with analytics

BThe team has not agreed on the root cause of the problem

CThe team did not agree on the business problem

DAn insufficient amount of planning was performed

Answer : C

Agreeing on the business problem is the first and most critical step in any analytics project, as it defines the scope, purpose, and objectives of the analysis, and aligns the expectations and interests of the stakeholders1.Agreeing on the business problem involves identifying the problem statement, the problem owner, the problem context, the problem impact, and the problem criteria2. If the team did not agree on the business problem, the solution proposed by the team may seem misaligned with the actual needs, preferences, or assumptions of the decision makers, and may not address the root cause or the main drivers of the problem. In this scenario, the team and the Director of Sales may have different views on what the business problem is, why it is important, and how it should be solved.

The other options are not correct explanations of what has gone wrong. This scenario can be addressed with analytics, as it involves using data to understand customer behavior, identify factors influencing cart abandonment, and recommend improvements to the website or the pricing strategy. The team may or may not have agreed on the root cause of the problem, but that is not the main issue, as the root cause analysis is a part of the data analysis step, not the problem definition step.The team may or may not have performed an insufficient amount of planning, but that is not the main issue, as the planning process is a subsequent step after the problem definition step, and it depends on the clarity and agreement of the business problem.

Question 4

As the organization looks to advance its analytics practices, the topic of provisioning access to executive dashboards and visualizations is under discussion. Establishing standards and implementing role based logins to executive dashboards will address:

AData management

BData security

CData governance

DContent management
Explanation:
According to the Guide to Business Data Analytics, data security is the protection of data from unauthorized access, use, modification, or destruction. Data security includes the policies, procedures, and technologies that ensure the confidentiality, integrity, and availability of dat
a. Data security is an important aspect of data management, which is the planning, execution, and oversight of the data lifecycle. Data security is also related to data governance, which is the establishment and enforcement of rules, roles, and responsibilities for data quality, access, and usage. Data security is not the same as content management, which is the creation, storage, distribution, and maintenance of digital content.
One of the ways to enhance data security is to provision access to executive dashboards and visualizations based on the roles and permissions of the users. This can help prevent unauthorized or inappropriate access to sensitive or confidential data, as well as ensure compliance with data privacy and ethical standards. By establishing standards and implementing role based logins to executive dashboards, the organization can address the data security needs of its analytics practices.

Answer : B

Question 5

DIAGRAM TAKEN

D2
Explanation:
In the context of Business Data Analytics (IIBA- CBDA), zero covariance between two variables indicates that there is no linear relationship between those variables. When the covariance is zero, it means the variables are independent of each other. In the provided options, graph 4 shows a random scatter of data points without any apparent trend or pattern, indicating zero covariance.

Answer : C

Question 6

What type of data model describes the highest level of relationship between entities and represents how a business perceives its information?

AConceptual

BEntity Relationship

CLogical

DPhysical
Explanation:
According to the Guide to Business Data Analytics, a conceptual data model is a type of data model that describes the highest level of relationship between entities and represents how a business perceives its information. A conceptual data model is independent of any specific technology or implementation details. It focuses on the key concepts and their attributes, as well as the business rules and constraints that govern them. A conceptual data model can help communicate the business requirements and scope of the data analysis project to various stakeholders.

Answer : A

Question 7

From a prior analytics study, a telecommunications company has concluded that due to the maturity of the market the cost of obtaining new customers is on the rise. As a result, the company wants to increase their efforts on retaining customers. One of the key performance indicators that will help them track their progress in this area is the rate at which customers leave/unsubscribe from their services over a given time period. Which performance indicator is this referring to?

ASubscription rate

BAcquisition rate

CChurn rate

DRetention rate
Explanation:
According to the Introduction to Business Data Analytics: A Practitioner View, churn rate is a measure of customer attrition, or the percentage of customers who stop using a product or service over a given time period. Churn rate is an important indicator of customer satisfaction, loyalty, and retention. A high churn rate implies that customers are dissatisfied or have found better alternatives, which can negatively affect the revenue and growth of a business. A low churn rate implies that customers are satisfied and loyal, which can positively affect the revenue and growth of a business. In this situation, the telecommunications company wants to increase their efforts on retaining customers, so they need to track their churn rate and try to reduce it.

Answer : C

IIBA Certification in Business Data Analytics IIBA - CBDA Exam Practice Test