CDP (Financial Data) 4

Question 1

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

Accepted Answer

Value at Risk (VaR)

Answer

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

Question 2

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

Accepted Answer

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

Answer

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

Question 3

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

Accepted Answer

SCD Type 2

Answer

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

Question 4

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

Accepted Answer

Dodd-Frank Act (CFTC reporting)

Answer

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

Question 5

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

Accepted Answer

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

Answer

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

CDP - Certified Data Professional Practice Test

CDP - Certified Data Professional Practice Test

CDP (Financial Data) 4