Capital One Assessment Test Advanced Applications 4

Question 1

A Capital One product team is analyzing customer lifetime value (CLV). If average monthly revenue per customer is $45, monthly churn rate is 3%, and gross margin is 70%, what is the CLV?

Accepted Answer

$1,050

Answer

CLV = (Monthly revenue × Gross margin) / Churn rate = ($45 × 0.70) / 0.03 = $31.50 / 0.03 = $1,050.

Question 2

Which Python pandas method efficiently fills missing values in a time-series transaction dataset using the previous valid observation?

Accepted Answer

df.fillna(method='ffill')

Answer

ffill (forward fill) propagates the last valid observation forward, which preserves the last known state in a time series.

Question 3

An analyst is evaluating two credit models. Model A has AUC-ROC of 0.82; Model B has AUC-ROC of 0.79 but captures 15% more high-risk customers. Which factor should drive the final model selection?

Accepted Answer

Business objective — if minimizing defaults is the priority, higher recall on high-risk customers may outweigh AUC

Answer

Model selection depends on business objectives; a lower AUC model that catches more high-risk customers may reduce losses more than one with marginally higher AUC.

Question 4

Capital One's data warehouse uses a star schema. In this context, what is the role of a fact table?

Accepted Answer

Stores quantitative business metrics (transactions, amounts, counts) with foreign keys to dimension tables

Answer

Fact tables hold measurable business events and metrics with foreign keys linking to dimension tables that describe those events.

Question 5

A logistic regression model for credit approval returns a probability of 0.73 for a customer. With a decision threshold of 0.60, what is the model's prediction?

Accepted Answer

Approve — 0.73 exceeds the 0.60 threshold

Answer

When the predicted probability exceeds the decision threshold (0.73 > 0.60), the model classifies the outcome as the positive class (approve).

Capital One Assessment Test Practice Test

Capital One Assessment Test Practice Test

Capital One Assessment Test Advanced Applications 4