CFA Level I · CFA Level I Exam · Introduction to Financial Data Science
A data scientist wants to see how the term frequency of the words appearing in a set of central bank statements compares across words, using font size to show how often each word occurs. The visualization most appropriate for this purpose is a:
A word cloud is most appropriate. It shows words in sizes proportional to how often they appear in the text, giving a quick view of term frequency. Heat maps and scatter plot matrices are for numeric variable relationships, not word counts.
- Aheat map
- Bword cloudCorrect
- Cscatter plot matrix
Explanation
A word cloud displays words with size proportional to frequency, suiting text data. A heat map uses color to show values in a matrix, such as correlations, and a scatter plot matrix shows pairwise relationships among numeric variables.
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