ANALYTICS QUIZ 1 (INTRODUCTION & CHAPTER 1) QUESTIONS WITH CORRECT ANSWERS|100% verified

ANALYTICS QUIZ 1 (INTRODUCTION & CHAPTER 1) QUESTIONS WITH CORRECT ANSWERS Predictions (why we do it, why we are bad at it) CORRECT ANSWER We ignore the risks that are hardest to measure, even when they pose the greatest threats to our well-being. Past performance does not guarantee future results. Role and creation of assumptions CORRECT ANSWER We make approximations and assumptions about the world that are much cruder than we realize. We abhor uncertainty, even when it is an irreducible part of the problem we are trying to solve. Data analysis can assist in conforming assumptions. Always document assumptions, because that's where we start. Out of sample problems (drinking and driving example) CORRECT ANSWER They have never happened. There is no sample size. Forecasters often don't consider these. Known knowns, known unknowns, unknown unknowns CORRECT ANSWER Known knowns - things that we know. Known unknown - things that we know we don't know. Unknown unknowns - We don't know that we don't know. Why we love models and the problems with them CORRECT ANSWER Our failure to realize how fragile they were to our choice of assumptions, yielded disastrous results. We focus on those signals that tell a story about the world as we would like it to be, not how it really is. Why FiveThirtyEight (538) blew the Trump presidency and what can we learn from it CORRECT ANSWER "Draw conclusions free of assumption" Bias is towards the status quo (previous model) Try to fit situations into existing models...should have been a little more cautious. Trump "broke the mold". For all this, 538 gave Clinton a 72% chance of winning the general. They focused on favorability. Why is the AICPA pushing analytics CORRECT ANSWER Better experience for client (since eliminating the tedium) Better experience for auditor (more on analysis and less on getting data) Creating more valuable insights Builds integrity into data Improves corporate compliance