BUSINESS ANALYTICS

UNIT 1

MULTIPLE CHOICE QUESTIONS

1. What is the primary purpose of business analytics?

A) To collect data from the market

B) To make informed business decisions using data
C) To create marketing campaigns
D) To manage company finances

Answer: B) To make informed business decisions using data

2. Which type of analytics focuses on predicting future trends and events based on
historical data?
A) Descriptive analytics
B) Predictive analytics
C) Prescriptive analytics
D) Diagnostic analytics
Answer: B
Description: Predictive analytics uses historical data and statistical algorithms to make
predictions about future events or trends.
3. What is the first step in the business analytics process?
a. Data Visualization
b. Data Preprocessing
c. Problem Definition
d. Model Building
Answer: c. Problem Definition
Description: The initial step in the business analytics process is problem definition. This
involves identifying and clearly defining the business problem or question that analytics will
address. Without a well-defined problem, the entire analytics process lacks direction and
purpose.
4. Which of the following is NOT a common data source for business analytics?
a. Social Media
b. Employee Surveys
c. Weather Reports
d. Financial Statements
Answer: c. Weather Reports
Description: While weather data can be useful in some contexts, it is not a typical data source
for most business analytics projects. Common data sources include financial data, customer
data, and so
5. What is the purpose of hypothesis testing in business analytics?
a. To build predictive models
b. To identify statistical significance
 c. To visualize data
d. To summarize data
Answer: b. To identify statistical significance
Description: Hypothesis testing is used to determine whether observed differences or effects
in data are statistically significant or likely due to chance.
6. Which phase of the Business Analytics process involves the application of algorithms to
data for analysis?
a) Data collection
b) Data visualization
c) Data modeling
d) Data cleansing
Answer: c) Data modeling
Description: Data modeling is the phase where mathematical and statistical algorithms are
applied to data for analysis.
7. How can Business Analytics help organizations manage risk?
a) By eliminating all risks
b) By predicting the exact outcome of all decisions
c) By identifying potential risks and providing insights to mitigate them
d) By replacing human decision-makers with algorithms
Answer: c) By identifying potential risks and providing insights to mitigate them
Description: Business Analytics can identify risks and suggest strategies to mitigate them,
improving risk management.
8. Which technology has significantly accelerated the processing of large datasets in
business analytics?
A) Mainframe computers
B) Dial-up internet
C) Cloud computing
D) Floppy disks
Answer: C
Description: Cloud computing provides scalable and efficient data processing resources,
which is vital for handling large datasets.
9. What is the primary focus of competitive intelligence in business analytics?
A) Analyzing customer behavior
B) Monitoring competitors and market trends
C) Predicting future sales
D) Managing employee performance
Answer: B
Description: Competitive intelligence involves monitoring and analyzing competitors and
market trends to make informed decisions.
10. Which type of data analytics typically deals with real-time data streams and rapid
decision-making?
A) Batch analytics
B) Real-time analytics
C) Historical analytics
 D) Predictive analytics
Answer: B
Description: Real-time analytics processes data as it is generated, enabling rapid decision-
making.
11. Which statistical measure is used to determine the spread or dispersion of data points
in a dataset?
A) Mean
B) Median
C) Variance
D) Mode
Answer: C
Description: Variance measures how spread out data points are in a dataset, providing insight
into data distribution.
12. What is a common challenge when implementing prescriptive analytics in an
organization?
A. Lack of available data
B. Ethical concerns
C. Overly complex visualizations
D. Resistance to change
Answer: D. Resistance to change
Description: Implementing prescriptive analytics often requires organizational changes and
can face resistance from stakeholders.
13. What is the term for the process of selecting relevant data from a large dataset for
analysis?
A. Data transformation
B. Data integration
C. Data sampling
D. Data encryption
Answer: C. Data sampling
Description: Data sampling involves selecting a subset of data for analysis to gain insights
without processing the entire dataset.
14. Which of the following is a key consideration when choosing an outsourcing partner for
analytics?
a) Maintaining data silos.
b) A focus on in-house analytics expertise.
c) Alignment with business objectives.
d) Ignoring data security.
Answer: c) Alignment with business objectives.
Description: A key consideration is whether the outsourcing partner aligns with the
organization;s business objectives and goals.
15. What is a potential risk of outsourcing critical analytics functions without proper due
diligence?
a) Decreased project timelines.
b) Cost savings.
c) Quality assurance.
d) Loss of control over analytics processes.
Answer: d) Loss of control over analytics processes.
Description: Outsourcing without due diligence can lead to a loss of control over critical
analytics functions.
16. Which of the following statements is false:

a.correlation is a measure of the strength of the relationship between two variables

b.correlation values are always positive
c.the correlation between two variables can be positive or negative
d.the correlation between two independent variables is zero
17. which type of analytics supports human decisions with visual analytics the user
models to reflect reasoning
a. predictive
b. deceive
c. descriptive
d. prescriptive
18. which type of analytics, recommend decision using optimization simulation etc.
a. predictive
b. deceive
c. descriptive
d. prescriptive
19. The essence of decision analysis is
a. choosing the best course of action among alternatives
b. thinking ahead to avoid negative consequences
c. breaking down complex situations into manageable elements
d. finding the root cause of why something has gone wrong
20. what is the characteristics of best models
1. Replicate the charectristics of a compound in isolation from the rest of the
systems
2. Are mathematical models
3. Replicate all aspects of the real world objective or decision
4. Accurately reflect relevant charecteristics of the real worls objective and
decision
21. A Business Case document contains the following EXCEPT
a)Cost-benefit analyses
b)Time estimates it would take to break even
c)Potential impact of new project on existing business operations
d)Meeting schedule for stakeholders
22. Which one of these is NOT a good habit of successful Business Analysts?
a)Communicate with stakeholders only once during Business Analysis
b)Work collaboratively with Project Managers
c)Are clear about their roles and responsibilities
d)Integrate creativity and critical thinking in their work

23. A company wants to determine the key factors affecting customer

retention. Which analysis method is most suitable?
a) Sentiment Analysis
b) Regression Analysis
c) Market Basket Analysis
d) Clustering
Answer: b) Regression Analysis

24. A company analyzes its sales data and finds that sales drop significantly
during certain months. What should be the next step?

a) Implementing a predictive model

b) Identifying possible reasons for the drop through further analysis
c) Ignoring the pattern as seasonal fluctuations
d) Immediately launching a new product
Answer: b) Identifying possible reasons for the drop through further analysis

25. A company wants to understand how different factors contribute to

revenue growth. Which analysis should it perform?

a) Time-Series Analysis
b) Factor Analysis
c) Cluster Analysis
d) Sentiment Analysis
Answer: b) Factor Analysis

26. A retail store wants to analyze customer buying patterns. Which technique
should it use?

a) Market Basket Analysis

b) Time-Series Analysis
c) Factor Analysis
d) Regression Analysis
Answer: a) Market Basket Analysis

27. A food delivery company wants to determine the best locations for setting
up new cloud kitchens based on customer demand. Which technique should
they use?

a) Clustering
b) Regression Analysis
c) Anomaly Detection
d) Hypothesis Testing
Answer: a) Clustering

28.An airline wants to analyze factors influencing flight delays. What step
should be performed after identifying key variables?

a) Data Preprocessing
b) Model Selection
c) Predictive Modeling
 d) Business Decision Implementation
Answer: b) Model Selection

29. A company finds that two variables, "Advertising Spend" and "Revenue,"
have a strong positive correlation. What does this indicate?

a) Higher advertising spend leads to higher revenue

b) Advertising spend causes revenue growth
c) There is an association, but not necessarily causation
d) The relationship is random
Answer: c) There is an association, but not necessarily causation

30.A bank wants to analyze fraudulent credit card transactions. After

detecting anomalies, what should be the next step?

a) Take immediate action based on findings

b) Validate results with subject-matter experts
c) Ignore anomalies
d) Assume all flagged transactions are fraudulent
Answer: b) Validate results with subject-matter experts

Fill up
1. The primary goal of implementing business analytics is to improve __________
Answer: decision making
Description: Business analytics aims to provide data-driven insights to support better
decision-making.
2. Statement: Ethical concerns in business analytics include responsibly handling sensitive
information and ensuring __________ compliance.
Answer: privacy
Description: Ethical considerations involve protecting privacy and complying with data
protection laws and regulations.
3. Statement: Predictive analytics uses historical data to identify patterns and make
__________ about future events or trends.
Answer: predictions
Description: Predictive analytics leverages historical data to forecast future outcomes and
trends.
4. Statement: Data __________ is the process of selecting relevant data from a large dataset for
analysis.
Answer: sampling
Description: Data sampling involves selecting a subset of data to analyze, especially when
dealing with large datasets.
5. Business analytics is the process of data to make informed
business decisions.
Answer analyzing and interpreting
 Description: Business analytics involves examining data to derive insights, patterns, and
information that can guide decision-making in organizations.
6. Companies can achieve a competitive advantage by leveraging data to make _______
decisions.
Answer: Informed
Description: Making informed decisions based on data-driven insights can lead to a
competitive advantage. It means using data analysis to guide strategy, operations, and
decision- making processes.
7. Data-driven companies have the ability to _______ their operations and processes based
on real-time data.
Answer: Optimize
Description: Optimization involves using data analytics to improve processes, resource
allocation, and overall efficiency, which can lead to a competitive edge in terms of cost
savings and quality improvements.
8. Variance measures the __________ of data points in a dataset.
Answer: Spread
Description: Variance provides insights into how data points are distributed within a dataset.
9. In finance, historical stock price data is often used for ________ analysis to assess the
performance of investments.
Answer: Technical
Description: Technical analysis in finance involves examining historical stock price data and
patterns to make investment decisions.
10. Historical data can be in the form of structured data, such as databases, or unstructured data,
such as _________.
Answer: Text
Description: Historical data can take various forms, including structured data stored in
databases and unstructured data like text documents or logs.
11. A logistics firm wants to reduce delivery costs by optimizing delivery routes. They
should use __________ analytics.

Answer: Prescriptive

12. A supermarket uses historical sales data to determine popular products. This is an
example of __________ analytics.

Answer: Descriptive

13. A manufacturing firm identifies defects in production by analyzing sensor data. This
process is called __________ monitoring.

Answer: Quality

14. A company identifies inefficiencies in its production process using real-time analytics.
This helps in __________ decision-making.

Answer: Data-Driven
15. In a business analytics team, the person responsible for interpreting data and making
strategic recommendations is the __________.

Answer: Data Analyst

16. A financial analyst uses __________ to assess company performance and predict future
growth.

Answer: Financial Modeling

17. In a business analytics framework, __________ ensures that data-driven insights align
with company objectives.

Answer: Business Strategy Team

18. A technology firm analyzes customer feedback to enhance product features. This is an
application of __________ analytics.

Answer: Text

19. A technology firm analyzes customer feedback to enhance product features. This is an
application of __________ analytics.

Answer: Business Analytics

20.Cloud computing allows users to access and store data on remote servers
instead of local devices

21 .Companies leverage business analytics to gain a __________ in the industry.

Answer: competitive advantage

TRUE OR FALSE

1. Descriptive analytics answers the question "What happened?"

True – Descriptive analytics focuses on summarizing historical data to understand past

behaviours or events.

2. Business analytics is only used to analyze past business performance.

False – Business analytics can also be used for predictive and prescriptive purposes, not just
historical analysis.

3. Data visualization tools like Tableau are used to present findings from statistical
analysis in a user-friendly format.

True – Data visualization helps stakeholders understand complex data insights more easily.
4. Business analytics tools like Power BI are used primarily for generating reports and
dashboards.

True – Tools like Power BI are designed for creating interactive visualizations, reports, and
dashboards to help businesses make data-driven decisions.

5. Predictive models can only be used for quantitative data and not qualitative data.

False – Predictive models can also be used for qualitative data (such as text) by applying
techniques like natural language processing.

6. Distribution fitting is the process of gathering historical data.

 true
 false

7. A Business Analyst's job in quality assurance is to analyze the process but he or she does
not document the analysis:
a)True
b)False

1. The study of past data to find trends and patterns (descriptiveanalytics)

2. Data stored in multiple locations for easy access and security
(cloudcomputing)
3. A structured collection of interrelated data (database)
4. A statistical computing language widely used in business analytics
(rprogramming)
5. A method for identifying relationships between business factors
(correlationanalysis)
6. A retail company uses this technique to predict customer demand for the
next quarter.answer : forecasting

7. A method used to analyze the success of a product launch.

answer: salesanalysis

8. The process of examining large datasets to uncover hidden patterns

(DataMining)
9. Data-driven decision-making approach (Analytics
10.A field that combines statistics, data, and technology to gain insights
(BusinessAnalytics))