IIBA CBDA Exam - Topic 2 Question 21 Discussion

A 3rd party is marketing an application for financial institutions to use for credit scoring. This application is an example of what type of analytics?

B) Prescriptive analytics

A) Descriptive analytics

C) Exploratory

D) Inferential Explanation: Prescriptive analytics is the type of analytics that provides recommendations or suggestions for optimal actions or decisions based on data analysis. Prescriptive analytics uses techniques such as optimization, simulation, and decision analysis to generate and evaluate various scenarios and outcomes. Prescriptive analytics can help financial institutions to use credit scoring to determine the best loan offers, interest rates, and repayment terms for their customers, as well as to manage risk and compliance. Prescriptive analytics is the most advanced and complex type of analytics, as it requires a high level of data quality, integration, and modeling, as well as human judgment and domain expertise.Reference: Certification in Business Data Analytics (IIBA - CBDA), IIBA, accessed on January 20, 2024. Business Data Analytics Certification - CBDA Competencies | IIBA, IIBA, accessed on January 20, 2024. Guide to Business Data Analytics, IIBA, 2020, p. 15-16.

IIBA CBDA Exam - Topic 2 Question 21 Discussion

Actual exam question for IIBA's CBDA exam

Question #: 21
Topic #: 2

[All CBDA Questions]

A 3rd party is marketing an application for financial institutions to use for credit scoring. This application is an example of what type of analytics?

ADescriptive analytics

BPrescriptive analytics

CExploratory

DInferential
Explanation:
Prescriptive analytics is the type of analytics that provides recommendations or suggestions for optimal actions or decisions based on data analysis. Prescriptive analytics uses techniques such as optimization, simulation, and decision analysis to generate and evaluate various scenarios and outcomes. Prescriptive analytics can help financial institutions to use credit scoring to determine the best loan offers, interest rates, and repayment terms for their customers, as well as to manage risk and compliance. Prescriptive analytics is the most advanced and complex type of analytics, as it requires a high level of data quality, integration, and modeling, as well as human judgment and domain expertise.Reference:
Certification in Business Data Analytics (IIBA - CBDA), IIBA, accessed on January 20, 2024.
Business Data Analytics Certification - CBDA Competencies | IIBA, IIBA, accessed on January 20, 2024.
Guide to Business Data Analytics, IIBA, 2020, p. 15-16.

Show Suggested Answer

Suggested Answer: B

by Paris at Sep 19, 2024, 01:22 AM

Limited Time Offer

25%

Off

Get Premium CBDA Questions as Interactive Web-Based Practice Test or PDF

Contribute your Thoughts:

Submit Cancel

Wilda

10 months ago

Sounds like a mix of different types, not just one.

upvoted 0 times

...

Dexter

10 months ago

Really? I’m surprised it’s not descriptive.

upvoted 0 times

...

Truman

10 months ago

I thought it was inferential analytics at first.

upvoted 0 times

...

Willard

10 months ago

Totally agree, it helps make better decisions.

upvoted 0 times

...

Rolande

11 months ago

This is definitely prescriptive analytics!

upvoted 0 times

...

Amber

11 months ago

From what I studied, prescriptive analytics helps in decision-making, so I lean towards that option. It seems to align with how financial institutions use credit scores.

upvoted 0 times

...

Eve

11 months ago

I'm a bit confused. Is credit scoring more about describing past data or predicting future outcomes? I thought it might be descriptive analytics.

upvoted 0 times

...

Rory

11 months ago

I remember a practice question about different types of analytics, and I think prescriptive was about recommending actions. So, this could fit that description.

upvoted 0 times

...

Hyun

11 months ago

I think this might be prescriptive analytics since it involves making decisions based on credit scoring data, but I'm not entirely sure.

upvoted 0 times

...

Meaghan

11 months ago

I'm a bit confused by the options here. Exploratory and inferential analytics don't seem to fit the description of the credit scoring application. I'll have to review my notes on the different types of analytics to make sure I understand the distinctions before answering this.

upvoted 0 times

...

Lucy

11 months ago

Okay, I've got this. Prescriptive analytics is the type that uses techniques like optimization and simulation to generate and evaluate different scenarios and outcomes. That sounds like what the question is asking about, with the credit scoring application. I'm confident this is the right answer.

upvoted 0 times

...

Stephane

11 months ago

Hmm, I'm a bit unsure about this one. The question mentions credit scoring, so I'm wondering if it could be related to descriptive analytics that summarizes and describes the data. But I'll have to think it through more carefully.

upvoted 0 times

...

Avery

12 months ago

This looks like a question on the different types of analytics. I think the key is to identify the type of analytics that provides recommendations or suggestions for optimal actions based on data analysis.

upvoted 0 times

...

Annice

12 months ago

I'm not completely sure, but wasn't there something about configuring a common DNS server too? That seems like it could be important for communication.

upvoted 0 times

...

Malinda

2 years ago

Prescriptive analytics, eh? Sounds like it's going to tell me how to live my life... or at least how to run our credit scoring business.

upvoted 0 times

Cheryl

2 years ago

A: Exactly, it helps us make the best loan offers and manage risk effectively.

upvoted 0 times

...

Graham

2 years ago

B: So it's like having a personal advisor for our credit scoring decisions.

upvoted 0 times

...

Rosendo

2 years ago

A: Yeah, prescriptive analytics is all about giving us recommendations based on data analysis.

upvoted 0 times

...

Marvel

2 years ago

I'm not sure, but I think it could also be inferential analytics.

upvoted 0 times

...

Amie

2 years ago

Prescriptive analytics, huh? I wonder if it can also prescribe the perfect outfit for our credit analysts. That would be a real game-changer!

upvoted 0 times

Jaleesa

2 years ago

D: Inferential

upvoted 0 times

...

Jeanice

2 years ago

C: Exploratory

upvoted 0 times

...

Ettie

2 years ago

B: Prescriptive analytics

upvoted 0 times

...

Torie

2 years ago

A: Descriptive analytics

upvoted 0 times

...

Cory

2 years ago

I agree with you, prescriptive analytics provides recommendations based on data analysis.

upvoted 0 times

...

Buck

2 years ago

Hmm, I'm not sure if this is the right type of analytics. Doesn't it feel a bit too 'prescriptive' for our financial institution?

upvoted 0 times

Kerry

2 years ago

D: It could be, but prescriptive analytics can help us make better loan offers and manage risk.

upvoted 0 times

...

Valentin

2 years ago

C: But do you think it might be too 'prescriptive' for our financial institution?

upvoted 0 times

...

Sherly

2 years ago

B: I agree, prescriptive analytics provides recommendations for optimal actions based on data analysis.

upvoted 0 times

...

Altha

2 years ago

A: I think this application falls under prescriptive analytics.

upvoted 0 times

...

Val

2 years ago

Prescriptive analytics? That's the one that gives me recommendations, right? Sounds like exactly what we need for our credit scoring app.

upvoted 0 times

Shawna

2 years ago

Absolutely, prescriptive analytics uses techniques like optimization and simulation to generate optimal actions. It's ideal for determining loan offers and managing risk.

upvoted 0 times

...

Merilyn

2 years ago

Yes, prescriptive analytics provides recommendations based on data analysis. It would be perfect for our credit scoring app.

upvoted 0 times

...

Tiera

2 years ago

I think the application is an example of prescriptive analytics.

upvoted 0 times

...