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: Jan 15, 2026

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Question 1

An insurance company is using a neural network for classifying claims as "Fraudulent" or "Non-Fraudulent." They decide to use ReLU (Rectified Linear Unit) as the activation function for the hidden layers. What is the primary purpose of using an activation function like ReLU in this neural network?

A : To scale the output between 0 and 1

B : To introduce non-linearity

C : To calculate weights in the hidden layers

D : To set bias terms to zero

Answer: B

Question 2

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?

A : Provide simplified output without explanation

B : Implement model-agnostic interpretability techniques

C : Replace the system with manual processing

D : Use the system without public disclosure

Answer: B

Question 3

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

Question 4

A financial institution is creating a model inventory. Which of the following should be included to ensure comprehensive governance?

A : Only the model’s purpose and validation report.

B : Model owner, but not developer information, for clarity.

C : A description of model assumptions but not its risk classification.

D : Model owner, purpose, methodology, assumptions, limitations, and risk tier.

Answer: D

Question 5