Free GARP RAI Exam Questions

Become GARP Certified with updated RAI exam questions and correct answers

Page: 1 / 66

Total 330 Questions | Updated On: Sep 10, 2025

Add To Cart

Question 1

A trading firm uses reinforcement learning to determine the best time to buy or sell an asset. They have partial information about the state transitions and aim to maximize long-term profits by identifying the best action in each state. Which reinforcement learning approach is most suitable for this scenario?

A : Model-based approach

B : Policy gradient

C : Value-based approach

D : Supervised learning

Answer: C

Question 2

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 3

What is a primary reason to remove duplicate observations during data cleaning?

A : To improve data storage efficiency

B : To avoid biases in analysis

C : To handle missing data effectively

D : To address inconsistent recording

Answer: B

Question 4

Which of the following scenarios represents a binary classification problem?

A : Predicting the probability of different stock prices

B : Forecasting next month’s sales in dollars

C : Determining if a transaction is fraudulent or legitimate

D : Grouping customers into three income tiers

Answer: C

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: Sep 10, 2025

Add To Cart