Question 1

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?

Options :

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 2

A portfolio manager is using reinforcement learning to maximize returns over time. To evaluate each policy, he wants to calculate the long-term value of returns using the Bellman equation, considering both immediate rewards and discounted future rewards. Which function does he use to achieve this?

Options :

A : Policy function

B : Reward function

C : Value function V(s)

D : State-action function Q(s,a)

Answer: C

Question 3

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

Options :

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 4

A financial institution finds that the system surrounding its risk model no longer aligns with its IT infrastructure requirements. To align with new standards, which adaptation task should they focus on?

Options :

A : Core adaptation (Ct)

B : Model adaptation (Mt)

C : Process review

D : System adaptation (St)

Answer: D

Question 5

In a dataset, marital status is recorded as “single,” “married,” “widowed,” or “divorced.” This attribute is best described as:

Options :

A : Numerical data

B : Binary data

C : Categorical data

D : Longitudinal data

Answer: C

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