Question 1
A financial services firm is developing a RAG application to answer analyst questions about quarterly earnings reports. The reports are dense PDFs. During evaluation, the team notices that retrieval often fails to find specific numerical data mentioned deep within tables. The current chunking strategy is a simple recursive character split with a size of 1000 and an overlap of 200. What is the most effective approach to improve retrieval accuracy for tabular data?
Answer and explanation
Correct answer: B
Simple text-based chunking strategies are ineffective for structured data like tables. The best approach is to use a specialized library to extract the tables, preserve their structure by converting them to a text-friendly format like Markdown, and then embed them. This ensures the semantic relationship between rows and columns is maintained, leading to much higher retrieval accuracy for queries about specific data points within those tables.