Business Metrics for Data-Driven Companies Quiz Answers

Get Business Metrics for Data-Driven Companies Quiz Answers

Business Metrics for Data-Driven Companies Week 01 Quiz Answers

Quiz : Business Metrics

Q1. Which of the following is NOT an example of a business metric?

• Sales revenues for three brands of baby formula for a month
• The New York State sales tax rate
• The average time visitors remain on the company’s web site
• The percentage of returning customers at a chain restaurant

Q2. Which of the following business metrics is an example of a revenue metric?

• Percent defective items from an assembly line
• Customer satisfaction with a product
• Rental prices of apartment leases by locations
• Average days inventory

Q3. Which of the following business metrics is an example of a profitability metric?

• How many fresh baked cakes have to be thrown away at the end of the day unsold
• Total annual costs of goods sold of an office product store
• The annual sales record of a company that makes phone apps
• A grocery store’s tracking record of customers’ fish purchases

Q4. Which of the following business metrics is an example of a risk metric?

• Days inventory of computers in an electronics store
• Monthly negative cash flow for a start-up
• The loss due to unsold fresh fruits each year at a grocery store
• Winter jacket sales during summer time

Q5. Identify which category the following business metric belongs to:

Units sales segmented by new and recurring customer

• Revenue metric
• Profitability metric
• Risk metric

Q6. The amount an airline spends on aviation fuel each month is what type of metric?

• Revenue metric
• Profitability metric
• Risk metric

Q7. An airline’s daily flight from Phoenix to New York is usually full, except for flights on Tuesdays and Wednesdays. What is the first change the airline should try?

• Offer discounts for Tuesday and Wednesday flights to customers.
• Increase the number of flights per day on Mondays, Thursdays, Fridays, Saturdays and Sundays.
• Decrease flight crews on Tuesdays and Wednesdays.
• Make advertisements about traveling on Tuesdays and Wednesdays to encourage more people travel on these two days.

Q8. The case above (Question 7) is an example of a ______ metric.

• Revenue
• Profitability
• Risk

Q9. One online shopping business found that 20% of shoppers quit during the checkout process without buying anything. A good next step would be:

• Add a small pop-up window on the checkout page with the texts “We are sorry if you are having trouble when checking out. We will fix it later.”
• When the reason that shoppers are dropping out of an online checkout is unknown, concluding that shoppers don’t understand the process well enough, are having second thoughts because prices are too high, or are simply irritated and need an apology, would be nothing more than a guess. A much better approach is to determine the real factors influencing dropout rates. This can be done through randomized experiments known as “A/B” Testing.
• Shoppers are randomly assigned to one of two groups: a group using the current process, and a group where minor changes are made to the process which may improve customer retention. Changes that result in significant improvement are kept, and others discarded. The video, Revenue Metrics: Amazon.com as a Leading Example of the Use of Dynamic Metrics – Part 2 at 3:23-4:46 discusses Amazon as an example of the sophisticated use of A/B testing for revenue optimization.
• Offer discounts to the 80% of customers who complete checkout as an encouragement for their patience.
• Send those customers a letter, email, or text with detailed instructions on how to use the checkout feature.

Q10. The average number of days inventory is held should be minimized for ALL of the following reasons EXCEPT ________.

• The longer the negative float, the more interest a business has to pay
• The longer a product stays in inventory, the less likely it will be purchased
• It costs money to store the products
• Customers are frustrated if something they want is not in stock
• Some products will be wasted completely if they don’t get purchased by a certain time

Q11. What is the estimated days inventory of Company X based on the information below?

Company X’s annual report listed a year-end inventory of $35.4 million, and annual cost of goods sold of $137.9 million.

• 93.7 days
• 67.2 days
• 3.9 days
• 94.3 days

Q12. A company sells its services “Net 60.” If it delivers the goods and provides an invoice in March, when can the company expect to be paid?

• March
• April
• May
• June
• July

Q13. The primary reason Egger’s Roast Coffee ran out of cash was:

• Rapid growth
• Inefficient production
• Unsold inventory
• Lack of innovation

Q14. To be a best-seller on Amazon, your book needs to…

• Be one of the top selling books in its Amazon topic subcategories
• Be sold all over the world
• Be popular and have good reviews
• Be one of the 1,000 best-selling books on Amazon

Q15. Amazon’s “frequently bought with” feature _________.

• Offers discounts if you buy two books
• Tells you how frequently the two books are bought together
• Is optimized to maximize Amazon’s revenues
• Is customized for your search terms

Business Metrics for Data-Driven Companies Week 02 Quiz Answers

Quiz : Working in the Business Data Analytics Marketplace

Q1. Data Scientists most often enter into that position by:

• No experience other than an aptitude working with quantitative data is required
• Starting as a Business Analyst and gaining experience and additional technical skills on the job
• Earning a doctorate degree in statistics or computer science
• Earning a masters degree in data science

Q2. Why is it important for Business Analysts to have “local knowledge” of business sectors?

• Business Analyst typically work in a specific business sector, such as insurance, and every sector has specialized metrics developed for that sector.
• Clients expect Business Analysts to be able to discuss their specific business environments in detail
• Client provided data typically only contains “local knowledge”
• All of the abov

Q3. Why should a Business Data Analyst have SQL skills?

• To retrieve data from different types of databases throughout the organization
• To increase their efficiency and autonomy
• To be able to combine data from multiple sources to create new data sets and answer new questions.
• All of the above.

Q4. True or False: “NONE of the nine skills required of all Business Data Analysts are part of the skills used regularly by the typical software engineer.

• False
• True

Q5. True or False: Strategic consulting firms with a software/systems integration focus often introduce the latest methods for achieving competitive advantage into a particular vertical market, such as retail pharmacies, which forces other companies in that vertical to use the same methods to stay competitive.

• True
• False

Q6. Hardware & software companies compete in a market that has a very unusual cost structure. This is because:

• These types of companies derive their value from developing and delivering proprietary intellectual property.
• They incur almost all their costs up front, before the first product is sold, while the incremental cost to create one more unit of the product is very low.
• It has high variable costs and low fixed costs.
• All of the above.

Q7. Business Data Analyst Tiffany Yu advises that in order to learn to write SQL queries well enough to be able to start gathering information for yourself, you will need to prepare (study) for about:

• A University Semester Course
• One Month
• Six Weeks
• One Week

Q8. Of the five business types represented among US companies, Traditional Strategic Business Consulting firms are the least likely to hire software engineers and technical project managers. Why?

• Analysts represent the largest single job type in these types of firms
• Strategic planning in the corporate world is critical to a firm’s success
• These firms focus on ways to improve business processes, such as increasing revenues and reducing risk.
• Strategic Business Consulting generally does not include developing or installing technology.

Q9. Which other type of Company represents the biggest threat to “bricks and mortar” Companies?

• Digital Companies
• Hardware and Software Companies
• Business Consulting firms with an IT focus
• Traditional Strategic Business Consulting firms

Q10. What software tool is Data Scientist Dai Li referring to, when he says, “Of course I also use [it]. It sounds like [it] is more nontechnical, but actually it is a very good tool. You can do a lot of data processing, data analysis, and data modeling if you are using [it] with very good efficiency.”

• Python
• Matlab
• SQL
• Excel

Q11. The current world leader in market share for remote (“cloud-based”) hosting of other companies’ data and applications is:

• Amazon
• IBM
• Microsoft
• Google

Q12. For brick and mortar businesses to survive digital competition, the most important factor is:

• Production efficiency
• Pricing
• Brand Awareness and customer loyalty
• Does the company deliver its product or service as quickly as its online competitors?

Q13. The term “Point-of-sale customization” means:

• Targeting individual customers with coupons or other special offers when they visit a store, based on their past purchase history
• It is possible to attract new customers by using more customized incentives
• Bricks-and-mortar companies are at a disadvantage because they can’t track history as well as online companies
• Every online customer is unique and therefore can and should be shown different prices and products

Q14. One survival strategy which will definitely NOT succeed for Barnes & Noble in its struggle with Amazon is:

• Selling coffee, food, and non-book gift items
• Converting Barnes and Noble into more of an exclusive literary club for paying members
• Putting more resources into their web presence and online sales
• Offering lectures, classes, and other social events related to books in its stores

Q15. What is the primary difference in business model between the two Digital Companies Uber and Airbnb?

• Uber transportation is much less expensive than regular taxi service; Airbnb room prices are similar to traditional hotel rooms
• Uber is highly profitable; Airbnb is not.
• Uber transportation is only available in certain cities; Airbnb properties can be anywhere in the world
• Uber sets prices for drivers; Airbnb lets property owners set prices themselves.

Business Metrics for Data-Driven Companies Week 03 Quiz Answers

Quiz : Going Deeper into Business Metrics

Q1. The “Sharpe Ratio” is:

• A revenue metric
• A risk metric
• A revenue metric divided by a risk metric
• A risk metric divided by a revenue metric

Q2. Actual CPC, divided by the conversion rate, is the revenue metric:

• Quality Score
• Maximum Cost per Click-through
• Ad Rank
• Acquisition Cost

Q3. Which of the following as NOT a demographic for which one can purchase targeted advertising?

• Member of Vegetarian Interest Group Facebook page
• Location by zip code
• Level of education
• Future Customer
• Age
• Income

Q4. The metric referred to as an “organic link” tells us that a visitor to our site came from:

• Directly typed in the url address of our site
• Clicking on a link to our site in a blog post or article
• A sponsored link
• An unpaid listing of our website that was returned in a search result

Q5. Some step in “search engine optimization” or SEO, are: (check all that apply)

• Get third-party websites with authoritative reputations and substantive
• opinions to mention us and provide a link to our website
• Make sure our content is current, substantive and directly relevant
• Increase our “social signal” by increasing our Facebook page “likes” and retweets
• Increase links to our website from all possible third-party websites

Q6. The Internal Rate of Return must be used to calculate returns, when:

• It is necessary to annualize the rate of return
• It is necessary to compare two different rates of return
• Cash is invested at several different times
• There are several methods that can be used, but a single method is preferred

Q7. In finance, it is useful to know both the return, and the volatility of return, of an investment, because:

• Higher volatility leads to lower returns.
• Higher volatility leads to higher returns.
• Volatility of returns is a measure of risk and avoiding risk is a fundamental aim of investing.
• Returns can always be increased through leverage (borrowing money to make a portion of the investment) but this increases volatility, so returns cannot be evaluated in isolation, absent knowledge of their accompanying volatility.

Q8. Why is relying upon the Life Time Value (LTV) of a customer when determining web ad spending potentially risky?

• Life Time Value does not take into account the high negative cash flow associated with initial customer acquisition; cash that it may take years to recoup.
• Life Time Value is a difficult metric to calculate accurately.
• Life Time Value is only useful if the CPC divided by the conversion rate is less than the LTV.
• Life Time Value is a profitability metric, not a risk metric.

Q9. In theory, an investor could generate any target return, simply by borrowing money to make a portion of the investment, and investing in an instrument that returns more than the risk-free rate. However, doing this would also:

• Require a more skilled manager
• Increase volatility of returns over the original instrument at the same rate that it increases excess returns.
• Inversely affect the discrete rate of return
• None of the above

Q10. The “Expense Ratio” is a profitability/efficiency metric – the money spent on operating a passive fund, divided by the total market value of the fund assets.

What expense associated with the fund is NOT included in the money spent operating the fund in calculating the expense ratio?

• Operating expenses associated with marketing the fund
• Costs incurred in fighting shareholder lawsuits against the fund managers
• Brokerage fees the fund pays to buy and sell assets
• The manager’s performance bonus

Q11. If active fund managers picked their portfolios from an Index “universe” at random, weighted them by relative market capitalization, and held them for a given time interval, what percentage of managers would be expected to out-perform the Index return, before taking their fees into account?

• 10%
• 28%
• 50%
• 80%

Q12. Why is it considered undesirable for a fund manager to have a large tracking error?

• Tracking error is a kind of risk metric – it implies wide variation from the appropriate benchmark
• Tracking errors are closely correlated with decreased profit
• Tracking errors are the standard deviation of “excess” returns.
• None of the above

Q13. What is the most established metric for evaluating Venture Capital and Private Equity Funds?

• Internal Rate of Return (IRR)
• Tracking Error
• Quality Score
• Positive cash flow

Q14. Why would investors in hedge funds typically want performance that has low correlation to the major equity markets?

• They invest in many different types of assets, including options and derivatives
• They are typically permitted to structure a deal so that they make money when a stock goes down in price
• Investors like to see a strong linear trend in the log value of wealth in a fund.
• Hedge fund investors typically also invest large amounts of capital in major equity markets, and target the highest possible risk-adjusted return on their combined portfolio.

Q15. On what measures are Mutual Fund Managers primarily judged relative to their benchmark1 point

• Excess return and tracking error
• Maximum drawdown and tracking error
• Linearity of log return and maximum drawdown
• All of the above

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