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?

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?

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?

Which type of risk might an organization face if an AI algorithm breaches individual privacy or yields biased results?

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?