Free GARP RAI Exam Questions

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 company wants to apply reinforcement learning to manage its warehouse inventory, learning when to restock based on demand fluctuations. What is a potential drawback of using reinforcement learning in this scenario?

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 tech firm is evaluating different models for an NLP project requiring high computational efficiency and parallel processing. Why might transformers be more suitable than RNNs for this task?

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?