(Financial Data) Flashcards

Which risk measure expresses the maximum expected loss over a given time period at a specified confidence level?

Answer: Value at Risk (VaR)

VaR quantifies the potential loss in value of a portfolio over a defined period for a given confidence interval (e.g., 95% or 99%).

What distinguishes accrual accounting from cash-basis accounting in financial data?

Answer: Accrual records transactions when earned/incurred regardless of cash flow; cash-basis records only when cash changes hands

Under accrual accounting, revenue and expenses are recognized when they occur economically, not necessarily when cash is received or paid.

A financial data engineer is designing a slowly changing dimension (SCD) for company ticker symbols. Which SCD type preserves full history of ticker changes?

Answer: SCD Type 2

SCD Type 2 adds a new row for each change with effective date ranges, preserving the complete history of attribute changes.

Which regulatory framework requires financial institutions to report derivative positions to a trade repository?

Answer: Dodd-Frank Act (CFTC reporting)

The Dodd-Frank Wall Street Reform Act mandated reporting of over-the-counter derivative transactions to CFTC-registered trade repositories.

What is 'amortization' in the context of financial data for intangible assets?

Answer: Systematically expensing the cost of an intangible asset over its useful life

Amortization allocates the cost of intangible assets (e.g., patents, licenses) as an expense over their expected useful economic life.

In financial data quality management, what does 'referential integrity' ensure for trade data linked to instrument master data?

Answer: Every trade record references a valid, existing instrument in the security master

Referential integrity enforces that foreign key values in trade records correspond to actual records in the referenced security master table.

Which financial data concept describes the process of matching trade confirmations between a buyer and seller to verify terms?

Answer: Trade confirmation/affirmation (matching)

Trade matching compares buyer and seller confirmations to verify that both parties agree on the trade terms before settlement.