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Set out the aims, stages and examples of data preparation and wrangling

CFA® Level II · Quantitative Methods · Big Data Projects · L2.QM.7.b

The idea

Preparation (cleansing) fixes errors: incompleteness (missing values), invalidity (values outside a meaningful range), inaccuracy (values that are not a true measure), inconsistency (data conflicting with other data), non-uniformity (different formats) and duplication. Wrangling transforms the cleaned data: extraction, aggregation, filtration, selection and conversion of data types. Outliers can be trimmed, removing extreme observations, or winsorised, replacing them with the values at chosen percentiles so none is lost. Scaling puts features on comparable scales: normalisation, (X − min) ÷ (max − min), maps to 0 to 1 but is sensitive to outliers; standardisation, (X − mean) ÷ standard deviation, centres on zero. The two scaling formulas are easy to mix up.

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