AI0-001 Practice Test 2 — 25 Questions

Question 1

Which TWO deployment strategies allow for testing a new model version before fully rolling it out?

Accepted Answer

Canary deployment. Canary deployment is correct because it routes a small percentage of live traffic to the new model version while the majority continues using the stable version. This allows real-world validation of the new model's performance and error rates under production load before a full rollout, minimizing blast radius if issues arise.

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Shadow deployment

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Direct cutover

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Blue-Green deployment

Question 2

Which THREE factors are most critical to consider when designing a continuous integration/continuous deployment (CI/CD) pipeline for machine learning?

Accepted Answer

Data quality and schema validation. Data quality and schema validation (A) are critical because ML pipelines are highly sensitive to data drift, missing values, and schema mismatches that can silently degrade model performance. Without automated validation at the CI stage, bad data can pass through and corrupt model training or inference, leading to unreliable outputs in production.

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A/B testing framework for comparing models

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Automated unit testing of application code

Question 3

An e-commerce company deploys a recommendation model that must serve predictions with sub-100 ms latency for millions of users during peak hours. The model is a large neural network. Which architecture is most suitable?

Accepted Answer

Use a distributed system with load balancers and model replicas.. Distributing the model across multiple servers with load balancers and replicas allows horizontal scaling to handle millions of concurrent users while maintaining sub-100 ms latency. This architecture provides fault tolerance and can dynamically adjust to peak traffic loads, which is essential for real-time inference with large neural networks.

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Batch process predictions every hour.

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Deploy the model on a single powerful GPU server.

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Use serverless functions with auto-scaling.

Question 4

A data scientist is training a convolutional neural network (CNN) for object detection. The training loss decreases rapidly but then plateaus at a high value, and the validation loss starts increasing. Which action should the scientist take to improve the model?

Accepted Answer

Reduce the model complexity. The training loss decreasing rapidly then plateauing at a high value while validation loss increases is classic overfitting. Reducing model complexity (Option C) directly addresses overfitting by decreasing the number of parameters or applying regularization (e.g., dropout, L2), which forces the network to learn more generalizable features rather than memorizing noise in the training data.

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Increase the learning rate

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Increase the number of epochs

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Add more convolutional layers

Question 5

A financial institution is training a risk assessment model. The dataset includes customer credit scores, income, age, and past loan defaults. During feature engineering, a data engineer creates a new feature 'income_to_debt_ratio'. Which type of feature engineering technique is this?

Accepted Answer

Feature combination. 'income_to_debt_ratio' is created by combining two existing features (income and debt) into a single derived feature. This is a classic example of feature combination (also known as feature crossing or feature construction), where arithmetic operations or logical rules are applied to existing variables to generate new predictive signals. The goal is to capture interactions or relationships that the original features alone may not express linearly.

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Feature encoding

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Feature scaling

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Feature selection

Question 6

A company is choosing between fine-tuning and RAG for a legal document assistant. Which TWO factors would MOST strongly favor RAG over fine-tuning?

Accepted Answer

The legal documents are updated frequently (weekly). RAG allows dynamic retrieval from a changing document base without retraining, and provides citation sources for transparency — critical in regulated domains like law.

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The model needs to understand complex legal terminology

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The queries require deep reasoning across multiple documents

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The company has limited compute budget for training

Question 7

A credit union uses an AI model to approve personal loans. The model was trained on historical data from the past five years. A recent internal review shows that the model approves loans predominantly for white applicants compared to other ethnicities, even when income and credit scores are similar. The credit union wants to comply with fair lending laws without significantly reducing overall approval rates. The data science team has access to the training data. What is the most appropriate remediation step?

Accepted Answer

Resample the training data to ensure balanced representation of ethnicities. Resampling the training data to ensure balanced representation of ethnicities directly addresses the root cause of the bias—skewed historical data—without altering the model's decision logic or approval thresholds. By rebalancing the dataset (e.g., oversampling underrepresented groups or undersampling the majority), the model learns from a more equitable distribution of features, reducing disparate impact while preserving overall approval rates. This approach aligns with fair lending laws by mitigating bias at the data level, which is the most fundamental and effective remediation step.

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Apply a fairness constraint that penalizes the model for disparate impact

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Discontinue the AI model and use manual approval for all loans

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Adjust the approval threshold so that approval rates are equal across ethnic groups

Question 8

A financial institution wants to deploy an AI system that automates loan approvals. Under the EU AI Act, this system would be classified as high-risk. Which of the following is a MANDATORY requirement for high-risk AI systems before market placement?

Accepted Answer

Establishing a risk management system throughout the system lifecycle. The EU AI Act requires a conformity assessment (often including third-party involvement) for high-risk AI systems to ensure compliance with requirements such as data governance, transparency, and human oversight. The other options are either voluntary, not required, or apply to lower-risk tiers.

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Obtaining a CE marking of conformity through self-assessment only

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Acquiring liability insurance for AI-related harms

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Publishing the training dataset in an open repository

Question 9

Which TWO techniques are commonly used to prevent overfitting in deep neural networks?

Accepted Answer

Dropout. Dropout is a regularization technique that randomly drops a fraction of neurons during training, which prevents the network from relying too heavily on any single neuron and forces it to learn more robust features. This reduces overfitting by introducing noise and effectively training an ensemble of sub-networks.

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Using a larger learning rate

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L1 regularization

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Increasing the number of layers

Question 10

A company wants to generate realistic images of new product designs. They have a large dataset of existing product images. Which generative AI approach is MOST suitable for creating novel, high-quality images?

Accepted Answer

Generative adversarial network (GAN). GANs (Generative Adversarial Networks) consist of a generator and discriminator that compete, producing highly realistic images. Diffusion models are also good but GANs are historically the go-to for image generation. VAEs produce blurrier images; LLMs are for text.

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Large language model (LLM)

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Variational autoencoder (VAE)

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Diffusion model

Question 11

A large enterprise is developing an internal LLM-powered assistant that can access the internet and execute code. To mitigate risks from excessive agency (e.g., the model performing unauthorized actions), which THREE security measures should be implemented?

Accepted Answer

Require human-in-the-loop approval for code execution and write operations. Requiring human-in-the-loop approval for code execution and write operations directly enforces a control over the model's agency, preventing it from performing unauthorized actions such as modifying files or executing arbitrary commands. This measure ensures that any action with side effects is vetted by a human operator, mitigating the risk of excessive agency where the LLM could autonomously cause harm.

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Deploy monitoring for anomalous input patterns

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Apply output filtering to block sensitive data in responses

Question 12

Under the GDPR, individuals have the right to not be subject to a decision based solely on automated processing if it produces legal effects. Which of the following is a typical safeguard that organisations must provide to comply with this right?

Accepted Answer

The right to obtain human intervention on the part of the controller. GDPR requires human intervention as a safeguard for automated decisions with legal effects. The right to explanation and human oversight are key. Deleting data is not a safeguard; consent is not sufficient; detailed explanations are part of transparency.

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The right to have all personal data deleted immediately

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The right to receive a detailed mathematical explanation of the model

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The right to demand a more favourable automated decision

Question 13

A team is building a regression model to predict house prices. The dataset includes numerical features (square footage, number of bedrooms) and categorical features (neighborhood, roof type). The categorical features have high cardinality (neighborhood has 200+ unique values). Which encoding strategy should the team use to avoid overfitting and maintain model interpretability?

Accepted Answer

Target encoding with regularization.. Target encoding with regularization is the best choice because it replaces each categorical value with the mean of the target variable for that category, which captures the relationship between the category and house prices. Regularization (e.g., adding a prior or using cross-validation) shrinks the encoded values toward the global mean, preventing overfitting on rare categories (e.g., neighborhoods with only a few houses). This maintains interpretability because each encoded value directly reflects the average price impact of that category, unlike black-box embeddings.

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Label encoding.

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Binary encoding.

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One-hot encoding with feature selection.

Question 14

Which TWO statements correctly describe the difference between supervised and unsupervised learning?

Accepted Answer

Supervised learning requires labeled data. Supervised learning relies on labeled datasets where each training example is paired with an output label, enabling the model to learn a mapping from inputs to outputs. This is a fundamental distinction from unsupervised learning, which works with unlabeled data to find inherent structures or patterns.

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Supervised learning is only used for classification

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Unsupervised learning always requires a target variable

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Supervised learning is a subset of reinforcement learning

Question 15

A machine learning engineer is training a neural network for image classification. The training loss decreases slowly and the model accuracy improves only marginally each epoch. Which hyperparameter adjustment is MOST likely to accelerate convergence?

Accepted Answer

Increase the learning rate. The training loss decreasing slowly and accuracy improving marginally each epoch indicates that the learning rate is too small, causing the optimizer to take very small steps toward the minimum of the loss function. Increasing the learning rate allows the optimizer to take larger steps per update, which accelerates convergence. Option C is correct because adjusting the learning rate directly addresses the step size in gradient descent.

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Add more hidden layers

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Increase the batch size

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Decrease the number of epochs

Question 16

A startup is building a chatbot for customer service. They have 500 recorded conversations and want to use a pre-trained language model to generate responses. However, they have limited computational resources and need the chatbot to respond in real-time. They are considering fine-tuning a large model like GPT-3 or using a smaller model like DistilBERT. The conversation data contains industry-specific jargon. Which approach should they take?

Accepted Answer

Fine-tune DistilBERT on the conversation data. Fine-tuning DistilBERT on the 500 recorded conversations allows the model to adapt to industry-specific jargon while maintaining real-time responsiveness due to its smaller size. DistilBERT is a distilled version of BERT that retains 97% of BERT’s language understanding with 40% fewer parameters, making it suitable for limited computational resources. Fine-tuning on domain-specific data is essential here, as pre-trained models like GPT-3 lack exposure to the startup’s specialized terminology, and using a smaller model ensures low-latency inference for real-time chatbot responses.

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Use GPT-3 via API without fine-tuning

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Train a custom RNN from scratch on the conversations

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Implement a rule-based system with keywords

Question 17

An attacker repeatedly queries a public LLM API with carefully crafted inputs to reconstruct the model's architecture and approximate weights. This is an example of which attack?

Accepted Answer

Model extraction. Model extraction attacks involve querying a public API with carefully crafted inputs to reconstruct a target model's architecture and approximate weights. By analyzing the outputs (e.g., logits or probabilities), an attacker can train a substitute model that mimics the original, enabling offline exploitation or competitive intelligence. This directly matches the scenario described.

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Data poisoning

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Membership inference

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Model inversion

Question 18

An organization wants to integrate an AI-powered summarization feature into their existing web application. The AI service will be called via API. Which factor is MOST important to consider for cost management?

Accepted Answer

Token pricing of the AI model. Token pricing directly impacts cost because API calls are billed based on the number of tokens (input + output). Understanding token usage helps estimate and control expenses.

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Authentication method (API key vs. OAuth)

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Rate limits per minute

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Network latency to the API endpoint

Question 19

A healthcare company is developing a predictive model to identify patients at risk of readmission within 30 days. The data engineering team has built a pipeline that collects data from multiple sources, including electronic health records (EHR), lab results, and wearable device data. During initial testing, the model's performance is poor, with high false positives. Upon investigation, the team discovers that the data contains significant temporal misalignment: lab results are timestamped when ordered, not when collected; wearable data is aggregated hourly; and EHR data has inconsistent update frequencies. The data pipeline currently joins all features on the patient ID without aligning timestamps. The data volume is large, and processing time is a concern. Which action should the data engineering team take to most effectively address the issue and improve model performance?

Accepted Answer

Implement a window-based feature aggregation (e.g., 6-hour windows) and align all features to the same time windows before joining.. Implementing a window-based feature aggregation with consistent time windows (e.g., 6-hour or 12-hour) and aligning all data to those windows before joining ensures temporal consistency and reduces noise. This approach addresses the root cause of misalignment while managing data volume through aggregation. Simply discarding data or padding with zeros loses valuable information. Using an interpolation algorithm may introduce unrealistic values for irregularly sampled data. Leaving the pipeline as-is and tuning the model does not fix the data quality issue.

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Discard all records where timestamps do not match exactly across sources, and only use records with perfect alignment.

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Leave the pipeline unchanged and instead adjust the model's classification threshold to reduce false positives.

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Use a data imputation algorithm to fill in missing timestamps and then join on the nearest timestamp.

Question 20

A company is implementing an AI solution for fraud detection. The dataset is highly imbalanced (only 1% fraudulent transactions). Which THREE techniques are most appropriate to address class imbalance? (Select three.)

Accepted Answer

Apply cost-sensitive learning by assigning a higher misclassification cost to the minority class.. Cost-sensitive learning directly addresses class imbalance by assigning a higher misclassification cost to the minority class (fraudulent transactions). This forces the model to penalize false negatives more heavily, thereby improving recall for the minority class without altering the dataset distribution.

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Reduce the number of features using principal component analysis (PCA).

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Use accuracy as the primary evaluation metric.