When data is visualized, or put into a pictoral or graphical format, it is often easier to understand and analyze. Visualizations can be used to present frequency distributions to discover multi-dimensional relationships or to help interpret unstructured data.
Organizing, Visualizing, and Describing Data
“Organizing, Visualizing, and Describing Data” is a Level I reading in the CFA Program. It covers the following learning outcomes.
Standard VII(B): Reference to CFA Institute, the CFA Designation, and the CFA Program
When referring to CFA Institute, CFA Institute membership, the CFA designation, or candidacy in the CFA Program, Members and Candidates must not misrepresent or exaggerate the meaning or implications of membership in CFA Institute, holding the CFA designation, or candidacy in the CFA Program.
Standard VII(A): Conduct as Participants in CFA Institute Programs
Members and Candidates must not engage in any conduct that compromises the reputation or integrity of CFA Institute or the CFA designation or the integrity, validity, or security of CFA Institute programs.
Standard VI(C): Referral Fees
Members and Candidates must disclose to their employer, clients, and prospective clients, as appropriate, any compensation, consideration, or benefit received from or paid to others for the recommendation of products or services.
Standard VI(B): Priority of Transactions
Investment transactions for clients and employers must have priority over investment transactions in which a Member or Candidate is the beneficial owner.
Standard VI(A): Disclosure of Conflicts
Members and Candidates must make full and fair disclosure of all matters that could reasonably be expected to impair their independence and objectivity or interfere with respective duties to their clients, prospective clients, and employer. Members and Candidates must ensure that such disclosures are prominent, are delivered in plain language, and communicate the relevant information effectively.
Bar Charts
Just as numerical data can be presented in a histogram, categorical data can be presented in a bar chart. The length or height of each bar represents the frequency of observations in that category.
Standard V(C): Record Retention
Members and Candidates must develop and maintain appropriate records to support their investment analyses, recommendations, actions, and other investment-related communications with clients and prospective clients.
Word Clouds
A word cloud is a useful way to present unstructured textual data. A word cloud consists of words extracted from a source text, with the size of each word corresponding to the frequency it appears in the source text. Common words such as “a” or “it” are generally excluded to focus on more meaningful information.