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IIBA Exam CBDA Topic 4 Question 28 Discussion

Actual exam question for IIBA's CBDA exam
Question #: 28
Topic #: 4
[All CBDA Questions]

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?

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Suggested 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.


by Major at Dec 04, 2024, 02:31 PM

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Titus
24 days ago
I agree with Amos, option B) 1 seems to be the correct choice based on the definition of zero covariance.
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Walker
28 days ago
Covariance, schmovariance! I'm just here for the snacks. But if I had to choose, I'd say graph 4 is the one that's keeping its distance, like a shy introvert at a party.
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Dawne
4 days ago
Alesia: So, we all think it's graph 4 then?
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Marla
9 days ago
User 3: I agree, graph 4 seems to be the odd one out.
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Alesia
10 days ago
User 2: Yeah, graph 4 looks like it's not related at all.
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Hyun
16 days ago
User 1: I think graph 4 shows zero covariance.
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Cathrine
1 months ago
Hmm, let me see... Graph 4 looks like it's on a strict diet, no relationship whatsoever. That's the one I'm going with.
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Bobbye
24 days ago
User 2: Yeah, Graph 4 looks completely unrelated.
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Angella
29 days ago
User 1: I think Graph 4 shows zero covariance.
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Amos
1 months ago
But in a graph with zero covariance, the points should be scattered randomly, which is shown in option B.
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Dorothy
1 months ago
I disagree, I believe the answer is A) 2.
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Amos
2 months ago
I think the answer is B) 1.
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Lai
2 months ago
Ah, the classic covariance graph! It's like a dance between two variables, and graph 4 is the wallflower of the bunch - standing alone, not moving a muscle.
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Avery
18 days ago
D: Got it, thanks for the explanation!
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Staci
18 days ago
D: Yes, that's correct. Graph 4 indicates zero covariance between the variables.
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Shenika
21 days ago
C: So, the answer is C) 4.
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Vivienne
22 days ago
B: Yeah, graph 4 shows zero covariance.
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Milly
26 days ago
C: So, the answer is C) 4 then?
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Dulce
1 months ago
B: Yeah, I agree. Graph 4 shows zero covariance, just like a wallflower at a dance.
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Domitila
1 months ago
A: I think it's graph 4.
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Jamal
1 months ago
A: I think it's graph 4, it looks like there's no relationship between the variables.
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