Free GARP RAI Exam Questions

A financial services firm is using a neural network with multiple hidden layers to predict the likelihood of loan default (binary classification). They find that the model isn’t learning well with the logistic activation function in the hidden layers. Which activation function should they consider switching to improve learning?

In an effort to understand why certain loan applications were denied, a bank deploys LIME (local interpretable model-agnostic explanations). What is the primary advantage of using LIME?

A government agency uses an AI system to determine eligibility for welfare benefits but faces public concerns about fairness due to its black-box nature. What is the best step to increase transparency?

In cost complexity pruning, a bank uses a parameter, α, to balance the residual sum of squares (RSS) and the number of terminal nodes. What is the primary role of this parameter?

An insurance company uses two different AI models for policy approval, one for Group A and another for Group B. The confusion matrices for each group are as follows:Group A Confusion Matrix:True Positives: 50False Positives: 10False Negatives: 40True Negatives: 90Group B Confusion Matrix:True Positives: 30False Positives: 20False Negatives: 70True Negatives: 80What fairness technique should the company use to balance the performance between the two groups?