Free GARP RAI Exam Questions

Become GARP Certified with updated RAI exam questions and correct answers

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Total 330 Questions | Updated On: Mar 26, 2026

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Question 1

During an NLS optimization, the analyst uses a gradient descent algorithm to update model parameters. If the improvement in the objective function falls below a certain threshold, the optimization process stops. What is the purpose of this threshold in NLS optimization?

A : To avoid overfitting by stopping after a set number of steps

B : To ensure convergence to the exact global minimum

C : To prevent unnecessary computations when further improvement is minimal

D : To improve model interpretability by limiting parameter updates

Answer: C

Question 2

A data scientist is tuning the ridge regression model’s hyperparameter, λ, to control the trade-off between model fit and complexity. If λ is set too high, what effect is most likely?

A : The model will overfit the data

B : The model will be underfit, as coefficients are heavily penalized

C : The model will become equivalent to OLS regression

D : The model will ignore the penalty term entirely

Answer: B

Question 3

A game developer uses a multi-arm bandit model to recommend different in-game offers to players. The model tracks which offers players respond to and adjusts future recommendations accordingly. In MAB terms, what is the purpose of the "policy" in this context?

A : To measure player engagement levels

B : To maximize expected future rewards by recommending the best offers

C : To randomly assign offers to players without any learning

D : To ensure a fixed sequence of offers is presented to each player

Answer: B

Question 4

A financial institution is implementing an AI model that uses proxies for loan approval decisions. Which of the following is a potential risk associated with using proxies?

A : Proxies might result in simplified metrics that don’t align with the actual objective.

B : Proxies require extensive computational resources.

C : Proxies ensure a direct alignment with the model’s intended objective.

D : Proxies make the model fully explainable to external auditors.

Answer: A

Question 5

An investment firm is setting up its model risk management framework. Who is primarily responsible for approving or rejecting models based on validation results?

A : Model developers

B : Internal auditors

C : Senior management

D : Model validators

Answer: C

Page: 1 / 66

Total 330 Questions | Updated On: Mar 26, 2026

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