CED Data Analysis & Reporting 2 — Questions and Answers
Question 1: An executive director notices that monthly revenue reports show high variance. Which statistical measure best quantifies this inconsistency?
- Mean absolute deviation
- Standard deviation (Correct answer)
- Median
- Mode
Correct answer: Standard deviation
Standard deviation measures the spread of data points around the mean, directly quantifying variance in revenue figures.
Question 2: A nonprofit's program data shows a correlation coefficient of -0.85 between staff turnover and client satisfaction. What does this indicate?
- No relationship exists between the variables
- As turnover increases, satisfaction tends to decrease (Correct answer)
- As turnover increases, satisfaction tends to increase
- The relationship is too weak to be meaningful
Correct answer: As turnover increases, satisfaction tends to decrease
A correlation of -0.85 is a strong negative relationship, meaning higher turnover is associated with lower client satisfaction.
Question 3: Which data visualization type is most appropriate for showing how a budget is distributed across multiple program areas?
- Line chart
- Scatter plot
- Pie chart (Correct answer)
- Histogram
Correct answer: Pie chart
A pie chart is ideal for displaying part-to-whole relationships, such as how total budget is divided among departments.
Question 4: A CED candidate reviews a report where the mean program cost is $50,000 but the median is $28,000. What does this suggest about the data?
- The data is normally distributed
- A few very high-cost programs are skewing the average upward (Correct answer)
- The median is an error and should match the mean
- Program costs are uniformly distributed
Correct answer: A few very high-cost programs are skewing the average upward
When the mean greatly exceeds the median, a small number of high outlier values are pulling the mean upward in a right-skewed distribution.
Question 5: Which type of report is most useful for comparing an organization's performance metrics against industry benchmarks?
- Internal audit report
- Benchmarking report (Correct answer)
- Variance report
- Cash flow statement
Correct answer: Benchmarking report
A benchmarking report directly compares an organization's key metrics to peer organizations or industry standards.
Question 6: An executive director uses a dashboard that updates in real time. Which data characteristic makes this possible?
- Longitudinal data
- Cross-sectional data
- Live or streaming data feeds (Correct answer)
- Historical archival data
Correct answer: Live or streaming data feeds
Real-time dashboards rely on live or streaming data feeds that continuously push updated information to the display.
Question 7: When presenting data findings to a board of directors, which practice best ensures clarity and decision-making effectiveness?
- Include all raw data tables for transparency
- Lead with key insights and use visuals to support conclusions (Correct answer)
- Use technical statistical jargon to demonstrate rigor
- Present findings without recommendations to remain neutral
Correct answer: Lead with key insights and use visuals to support conclusions
Leading with key insights and supporting visuals helps board members quickly grasp findings and make informed decisions.
CED Data Analysis & Reporting 2
An executive director notices that monthly revenue reports show high variance.
Which statistical measure best quantifies this inconsistency?