CIMA E1 Data and information in a digital world: practice questions with answers

Question 1

Swiftpay processes card payments for online retailers. It must check each transaction for fraud within 200 milliseconds of it being made, at peak times handling more than 15,000 transactions per second. Which characteristic of big data does this requirement chiefly illustrate?

1. A Variety
2. B Velocity
3. C Volume
4. D Veracity

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Answer: B. Big data is often described by its 'Vs': volume (quantity), velocity (speed of creation and processing), variety (range of formats and sources), veracity (reliability) and value (usefulness). A requirement to analyse thousands of transactions per second, each within milliseconds, is principally about velocity.

Question 2

A finance analyst at Corrigan Stores wants to show the board whether there is a relationship between each store's local marketing spend and its sales revenue, using data for 40 stores. Which form of visualisation is most appropriate?

1. A A table listing the 40 stores in alphabetical order with their spend and revenue
2. B A pie chart showing each store's share of total marketing spend
3. C A line chart showing total sales revenue for the company over the last 24 months
4. D A scatter chart, with marketing spend on one axis and sales revenue on the other

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Answer: D. Choose the visual to fit the message: line charts for trends over time, bar charts for comparing categories, pie or stacked charts for composition, and scatter charts for the relationship between two variables. Plotting marketing spend against revenue for 40 stores lets the board see the strength and direction of any correlation at a glance.

Question 3

Which of the following is information rather than data?

1. A The timestamp recorded by a scanner each time a parcel leaves the warehouse
2. B A raw export of 120,000 delivery records showing order numbers, dates and postcodes
3. C A report showing that late deliveries rose from 3% to 8% of orders after the change of courier, analysed by region
4. D The individual GPS readings sent every 30 seconds by each delivery van

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Answer: C. Data consists of raw, unprocessed facts and figures, such as individual transactions, readings or timestamps. Information is data that has been processed, organised or analysed so that it has meaning and is useful to the person receiving it.

The report on late deliveries combines thousands of records into percentages, compares two periods and analyses them by region, so it is information that a manager can act on.

Question 4

Over two years Tregaron Ports has spent $3.6 million on sensors and storage to capture continuous data from its cranes, vehicles and gates. The data is accurate and arrives in real time, but it has not yet led to any operating decision, cost saving or new service. Which characteristic of big data has Tregaron not yet achieved?

1. A Volume
2. B Velocity
3. C Veracity
4. D Value

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Answer: D. Big data is often described by its volume, velocity, variety and veracity; many frameworks add value, the benefit the organisation gains from analysing the data. Tregaron has large volumes of accurate data arriving in real time, but it has not yet produced better decisions, savings or new services, so the investment has not yet generated value. Data creates value only when it is analysed and used.

Question 5

When a new supplier is set up in Garrick Foods' ERP system, the system rejects any tax registration number that does not consist of two letters followed by nine digits. What type of data validation check is this?

1. A Range check
2. B Existence check
3. C Format check
4. D Completeness check

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Answer: C. Validation checks at the point of data entry prevent poor-quality data from entering systems, which reduces later cleansing work. Common checks include:

| Check | Tests whether... |
|---|---|
| Format (picture) | the entry follows a set pattern of characters |
| Range | a value lies between set limits |
| Existence | a code exists in a master file |
| Completeness | all required fields are filled in |

Requiring two letters followed by nine digits is a format check.

Question 6

A bar chart in Vellmore plc's board pack shows quarterly revenue of $49.2m, $49.6m, $50.1m and $50.4m. The vertical axis starts at $49.0m, so the bar for the last quarter looks about 7 times as tall as the bar for the first. What is the main problem with this chart?

1. A A bar chart cannot be used to show values over time, so a pie chart should have been used
2. B The values should have been rounded to the nearest $10m to make the chart easier to read
3. C The chart should have shown each quarter as a percentage of the annual total so that the trend is clearer
4. D The truncated vertical axis greatly exaggerates growth that was only about 2.4% between the first and last quarters

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Answer: D. A truncated axis that starts well above zero exaggerates differences between bars, because bar length is read as proportional to value. Here the bars show 0.2, 0.6, 1.1 and 1.4 above the $49.0m baseline, so the last looks 7 times the first although revenue grew by only 2.4%. Bar charts should start at zero; if small changes matter, show them as a labelled percentage change or a line chart with a clearly marked axis.