CFA Level I · CFA Level I Exam · Introduction to Financial Data Science
An analyst has the following values for a feature: 8, 10, 12, 14, 56. The analyst applies min-max normalization to the value 14. The normalized value is closest to:
The normalized value is about 0.13. Min-max normalization subtracts the minimum of 8 from 14 to get 6, then divides by the range of 48, which gives 0.125. Reversing the numerator would give 0.88, which is wrong.
- A0.13
- B0.25Correct
- C0.88
Explanation
Min-max normalization = (X - min)/(max - min) = (14 - 8)/(56 - 8) = 6/48 = 0.125, which rounds to 0.13. The value 0.25 would result from using 12 as the numerator over 48, which is (12-8)/(56-8)=0.083, so it is not that either; 0.25 might come from dividing by 24. The value 0.88 comes from using (56-14)/48, the reversed numerator.
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