Sample Questions
Question 1
Easy
Which of the following best describes prescriptive analytics?
Solution
B is correct.
Prescriptive analytics goes beyond describing or predicting outcomes; it recommends specific actions to achieve desired results using optimization models, simulations, and decision analysis. It answers the question: what should we do? The four types form a hierarchy: descriptive, diagnostic, predictive, prescriptive.
Prescriptive analytics goes beyond describing or predicting outcomes; it recommends specific actions to achieve desired results using optimization models, simulations, and decision analysis. It answers the question: what should we do? The four types form a hierarchy: descriptive, diagnostic, predictive, prescriptive.
Question 2
Medium
Under SEC reporting rules, which measure meets the definition of a non-GAAP financial measure?
Solution
D is correct. Removing restructuring charges changes the GAAP earnings amount. Dividing that adjusted amount by employee count produces a measure incorporating non-GAAP earnings. The other alternatives use operating statistics or unadjusted GAAP amounts.
Question 3
Hard
Under SEC filing rules, how does a similar expense in either preceding year affect a proposed non-recurring adjustment?
Solution
D is correct, because similar expenses in either of the preceding two years preclude the specified non-recurring description in a filing. This labeling restriction does not independently prohibit an otherwise permissible adjustment under an accurate label. Recurring costs still require scrutiny for economic relevance and potentially misleading exclusion.
Authority: Regulation S-K, Item 10(e), Non-GAAP Financial Measures, as explained in the BAR I.A2 lesson, section 5.4.
Authority: Regulation S-K, Item 10(e), Non-GAAP Financial Measures, as explained in the BAR I.A2 lesson, section 5.4.
