MIS 0855 Study Guide - Midterm Guide: Kenneth Rogoff, Jpmorgan Chase, 2012 Jpmorgan Chase Trading Loss
23 May 2018
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Quiz Questions
• Quiz 5 (7.1 Readings)
o Gandel cites the case of Reinhart and Rogoff where an Excel spreadsheet error: led
them to accidentally exclude five countries from their analysis
o Gandel cites the case of Barclays effort to purchase Lehman Brother, where the
following Excel error resulted in the accidental purchase of 179 toxic assets: cells were
hidden instead of deleted
o According to Redman, which is NOT a cause of bad data? Everyone is invested in getting
the data right
o According to Taber, what is a common way Excel corrupts imported data? Dates are
often converted into integers
o According to the Microsoft article, before cleaning your data you should: make a backup
copy of the data in a separate workbook
• Quiz 6 (8.1 Readings)
o Which of the following are NOT part of the S.M.A.R.T. criteria for KPIs? Actionable
o Aodig to “haa, the pole ith soig opofit outoes as suess o
failue is: the distitio etee suess ad failure is not always clear
o According to Olson, insurance companies are seeking real-time customer data so that:
they can build better customer risk profiles
o According to Olson, real-time customer data could result in the ability to adjust
premiums: daily
o According to Bialik, a key issue with counting steps as a measure of fitness is: steps are
not the only kind of exercise, all steps do not burn the same calories, tools like Fitbit
do’t auatel out steps
• Quiz 7 (9.1 Readings)
o According to Strickland, which of the following is NOT a type of data integration
approach? Querying
o Aodig to Gallaghe, hat is a ke goal of the RNC’s e data platfo? To eate a
single data platform for all Republican candidates
o According to Gallagher, the RNC wants to customize the experience for visitors to
GOP.com by: look at past interactions with the GOP.com site
o According to Farmer, the purpose of creating an information scent is to: give the user
hints where they should explore further
o The Tableau article suggests the following to when creating dashboards: minimize
distracting text and formatting
Datas Crediilit Prole ‘eda
• Just a slight error in data can be very costly
• Workers waste up to 50% of their time hunting for data, identifying and correcting errors, and
seekig ofiato soues fo data the do’t tust
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• When data is unreliable, managers quickly lose faith in them and fall back on their intuition to
make decisions, steer their companies, and implement strategy
• Connect Data Creators with Data Customers
o To oets atte i a piee of data’s lifetie:
▪ Moment it is created
▪ Moment it is used
o Qualit of data is fied at oet of eatio; is’t judged util oet of use
o Improving data quality is about getting the creators of data to partner with the users
o Making sure creators know how data will be used is one of the easiest and most
effective ways of improving quality
o Addressing the vast majority of data quality issues does not require big investments
o Disciplined measurement, automated controls, and methodologies like Six Sigma are
helpful
• Idea in Brief
o The Problem: Workers waste a great deal of time looking for, identifying and correcting
data
o How it Happens: creators of data have little understanding of how others in the
organization use that information; users fix errors on their own without addressing the
root causes of the mistakes
o The Solution: better communication between creators and users
• Focus on Getting New Data Right
o Focus on improving the way new data are created by identifying and eliminating the
root causes of error
o E. Dillig depatet at Cheo. Maage ould’t deteie fo the data hethe
the drilling of a well had been completed on a budget
▪ Two objectives to fix the data: wanted something simple and wanted business
units to improve quickly
▪ Keep track of progress for corrections to be effective
• Put Responsibility for Data in the Hands of Line Managers
o Finance creates data about performance against quarterly goals
o IT department tasked to fix quality problems, but usually have little success
o Business departments benefit tremendously from having access to good data to
improve products, services, and decision making but are also the ones to hear from
angry customers and explain poor results to shareholders
o Smart companies place responsibility for data quality with data creators and their
internal data customers
o For most companies, real barriers to improving data quality are that managers refuse to
adit thei data ae’t good eough ad othes sipl do’t ko ho to fi poo-
quality data
o Getting through those barriers takes the commitment of senior leadership
Da Eel! How the Most Iportat “oftware Appliatio of All Tie is ‘uiig the World Gadel
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• Kenneth Rogoff
o While easuig the aout of this out’s det, Rogoff and Reinhart found a coding
error that excluded the first 5 countries of their dataset
• London Whale
o JPMorgan Chase trading loss
o Eel odel as supposed to oito ad liit the aout of isk the ak’s Lodo
traders were taking
o Risk officers believed the credit derivatives bets were half as risky as they actually were
• MF Global
o Cosultats hied fi deteied it eeded to ipoe the ed use opute
tools suh as Eel speadsheets
o Used to oito isk ad ho uh oe it had i its ustoes’ accounts
o Used to ake sue that soe of that oe did’t ed up i the CEO’s aout
o Upgrades never made
• Barclays purchase of Lehman Brothers
o Makers of spreadsheet hid, rather than deleted, nearly 200 cells
o When Excel file was converted into a PDF and sent to bankruptcy court, hidden parts
reappeared
o British bank and Lehman Barclays forced to swallow losses on an additional 179 toxic
deals it never intended to buy
• Utah
o Misalulatio i Utah’s offie of eduatio udestated the ue of studets ho
would eoll i the state’s puli shools ad led to a $5 illio udget shotfall
• Fannie Mae
o Error in spreadsheet made Fannie look $1.3 billion more profitable than it actually was
• Native Americans
o Tribe of Native Americans entered the wrong row into the cell of the spreadsheet that
contained the formula to compute the net present value of the Island of Manhattan
(worth only $24)
o Just kidding, the error was made in Lotus
Stupid Data Corruption Tricks (Taber)
• Open a CSV file directly into Excel
• Copy formulas that use relative coordinates
• Aidetall use VLOOKUP’s fuzz ath fogettig to ilude false as paaete
• Put values in fields that are supposed to be pointers or references
• Miss the data type (dates as integers)
• Sort a spreadsheet, but not include all the columns
• Start working on the database without doing a full backup first
• What sste a I logged oto?
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