Your question is Normalization vs Denormalization Tradeoffs. Take a moment with it on the right.
Talk me through your thinking if you like. When you're confident, submit your answer and I'll grade it like a real screen (7/10 or better passes).
In financial systems such as Raymond James client reporting and advisor data platforms, schema design affects data quality, maintainability, and query performance. Interviewers ask this to see whether you understand both relational design principles and practical tradeoffs.
Explain what database normalization is and why it is used. Then describe when you would intentionally denormalize a schema, what benefits you gain, and what risks you introduce. Your answer should cover how normalization supports data integrity, how denormalization can improve read performance, and how you would decide between the two in a production PostgreSQL environment.
You do not need to recite every normal form formally, but you should be able to explain the core idea, give a clear example, and discuss realistic cases where a Raymond James reporting or analytics workload might justify denormalization.