IIBA Exam CBDA Topic 4 Question 18 Discussion

Actual exam question for IIBA's CBDA exam

Question #: 18
Topic #: 4

A data scientist is analyzing a dataset to determine if there is a strong relationship between two variables. A measure of covariance is done. Which of the following graphs indicate Zero Covariance between variables?

Show Suggested Answer

Suggested Answer: C

Covariance measures the directional relationship between the returns on two assets. A positive covariance means that asset returns move together while a negative covariance means they move inversely. Zero covariance indicates that the returns on the two assets move independently of each other. In the context of a scatter plot, zero covariance is represented by a plot where the points do not show any upward or downward trend but are rather scattered randomly on the graph with no discernible pattern.

Graph 4 displays such a pattern where there is no apparent relationship between the variables on the x and y axes, indicating that there is zero covariance between them.

by Frederic at Aug 05, 2024, 01:37 PM

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Annita

3 months ago

I think the answer is A) 2, as the points in graph 2 are clustered around a straight line.

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Della

3 months ago

I believe the answer is C) 4, because the points in graph 4 seem to have a clear linear relationship.

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Verdell

3 months ago

I agree with Ryan, because in graph 1 the points are scattered randomly.

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Emilio

3 months ago

Gotta be Graph 4. It's like throwing spaghetti at a wall - the points are just all over the place with no pattern. Zero covariance for sure.

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Caitlin

3 months ago

Yeah, Graph 4 shows zero covariance. The points don't follow any pattern.

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Sabine

3 months ago

I think it's Graph 4 too. The points are scattered randomly.

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Ryan

3 months ago

I think the answer is B) 1.

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Novella

3 months ago

I'm not sure, but I think D) 3 could also indicate zero covariance as the points are spread out evenly.

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Kenny

4 months ago

Graph 4 for sure. It looks like my desk after a tornado went through - complete chaos and no relationship between the variables.

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Carol

2 months ago

A: So, zero covariance between those variables.

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Sarah

2 months ago

B: Yeah, definitely not seeing any pattern there.

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Sheldon

3 months ago

A: I think it's graph 4 too. Looks like a jumbled mess.

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Rosio

4 months ago

I agree with Dorothy, B) 1 seems to have zero covariance as the points are scattered randomly.

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Sol

4 months ago

I think Graph 1 indicates zero covariance. The points form a perfect horizontal line, which means the variables are completely uncorrelated.

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Dorothy

4 months ago

I think the answer is B) 1 because the graph shows no relationship between the variables.

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Janine

4 months ago

Definitely Graph 4. It looks like a porcupine mating dance - no correlation whatsoever!

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Carlota

4 months ago

Graph 4 clearly shows zero covariance between the variables. The points are randomly scattered without any discernible pattern.

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Jannette

2 months ago

Exactly, the points are all over the place in graph 4

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Sheridan

3 months ago

So, we can conclude that there is no strong relationship between the variables

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Junita

3 months ago

I agree, graph 4 shows zero covariance

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Margurite

3 months ago

I think the answer is C) 4

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