AI0-001 AI Concepts and Foundations Practice Test 1 — 15 Questions

Question 1

A team is designing an AI system for autonomous driving. They need to decide between an end-to-end deep learning approach versus a modular pipeline (perception, planning, control). Which is a key advantage of the modular approach?

Choose an answer to begin — your selection is scored in the full session.

Accepted Answer

Each module can be validated separately.. The modular pipeline approach decomposes the autonomous driving task into distinct components (e.g., perception, planning, control), each of which can be independently developed, tested, and validated. This separation allows engineers to verify the correctness of each module against its own specification, which is critical for safety-critical systems like autonomous driving. In contrast, end-to-end deep learning models treat the entire system as a black box, making it difficult to isolate and validate individual behaviors.

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It typically has lower inference latency.

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It handles novel scenarios better due to joint training.

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It requires less engineering effort.

Question 2

A company uses an AI model to screen job applications. The model is trained on historical hiring data that reflects past biases. After deployment, the model disproportionately rejects candidates from certain demographics. Which concept does this best illustrate?

Accepted Answer

Algorithmic bias. Algorithmic bias refers to systematic and unfair discrimination in AI outputs due to biased training data or model design. Option A (overfitting) is about a model that performs well on training data but poorly on new data due to excessive complexity. Option B (model drift) is about performance degradation over time due to changes in data distribution. Option D (underfitting) is when a model is too simple to capture patterns.

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Overfitting

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Model drift

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Underfitting

Question 3

A company wants to use AI to automatically categorize customer support tickets into topics like 'billing', 'technical', 'account'. They have 10,000 labeled examples. Which algorithm is most suitable for this task?

Accepted Answer

Logistic regression. Logistic regression is a supervised learning algorithm that models the probability of a categorical outcome based on input features. With 10,000 labeled examples, it can efficiently learn decision boundaries to classify tickets into 'billing', 'technical', or 'account' by using a softmax (multinomial logistic regression) extension for multi-class classification.

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DBSCAN

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Apriori

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Principal component analysis (PCA)

Question 4

Refer to the exhibit. The training log shows loss and accuracy for a binary classification model. What is the most likely issue with this model?

Accepted Answer

Overfitting. The training log shows that training loss continues to decrease while validation loss increases after a certain point, and training accuracy approaches 100% while validation accuracy plateaus or drops. This divergence is the classic signature of overfitting, where the model memorizes noise in the training data rather than learning generalizable patterns.

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Insufficient epochs

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Underfitting

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Data leakage

Question 5

A retail company deploys a machine learning model to predict customer churn. The model outputs a probability between 0 and 1, and churn is predicted if probability > 0.5. After deployment, the model has a high false positive rate (many non-churning customers labeled as churn), which leads to unnecessary retention offers and increased costs. The data science team confirms the model was trained on historical data with a balanced class distribution. The business team wants to reduce false positives while maintaining a reasonable true positive rate. However, they cannot retrain the model because the original training data is no longer available. What is the best course of action to reduce false positives?

Accepted Answer

Increase the decision threshold to a higher value, such as 0.7.. Increasing the decision threshold to a higher value, such as 0.7, reduces false positives because the model will only predict churn when it is more confident. Since the model cannot be retrained, adjusting the threshold is the only way to trade off between precision and recall without modifying the model itself.

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Retrain the model using only the most recent three months of data.

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Collect new labeled data and perform transfer learning from the original model.

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Decrease the decision threshold to a lower value, such as 0.3.

Question 6

A company deploys an AI model to predict equipment failure. The model performs well on historical data but fails to generalize to new data from a different factory. Which concept best describes this issue?

Accepted Answer

Overfitting. (Overfitting) is correct because the model learned patterns specific to the historical data from the original factory, including noise and factory-specific nuances, rather than generalizable features. When applied to new data from a different factory, those learned patterns do not hold, causing poor performance. This is the classic symptom of overfitting: high accuracy on training data but low accuracy on unseen data.

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Transfer learning

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Underfitting

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Bias-variance tradeoff

Question 7

A data scientist trains a linear regression model to predict house prices. The model has high bias and low variance. Which action would most likely reduce bias?

Accepted Answer

Add polynomial features. High bias indicates the model is underfitting the data, meaning it is too simple to capture the underlying patterns. Adding polynomial features increases model complexity by introducing non-linear terms, which allows the linear regression model to better fit the training data and thus reduce bias.

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Apply L2 regularization

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Increase the training dataset size

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Remove irrelevant features

Question 8

An AI engineer trains a deep learning model for image classification. After training, the training accuracy is 99% but validation accuracy is 85%. Which technique would best address this discrepancy?

Accepted Answer

Add dropout layers. The high training accuracy (99%) and lower validation accuracy (85%) indicate overfitting, where the model memorizes training data but fails to generalize. Dropout layers randomly deactivate neurons during training, forcing the network to learn more robust features and reducing overfitting. This technique directly addresses the discrepancy by improving validation performance without sacrificing training capacity.

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Increase data augmentation

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Decrease the learning rate

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Increase the number of layers

Question 9

A company implements a chatbot using a rule-based system. Users complain the chatbot cannot handle new queries. Which AI approach should be considered to improve flexibility?

Accepted Answer

Machine learning. Machine learning (ML) enables a chatbot to learn from new data and adapt to unseen queries, unlike a static rule-based system. By training on historical conversations, an ML model can generalize patterns and handle novel inputs without requiring explicit rules for every scenario.

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Expert system

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Natural language processing (NLP)

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Robotic process automation

Question 10

An AI model for detecting fraudulent transactions has high precision but low recall. Which business impact is most likely?

Accepted Answer

Many fraudulent transactions go undetected. High precision means that when the model flags a transaction as fraudulent, it is very likely correct. However, low recall indicates that the model misses a significant proportion of actual fraudulent transactions. Therefore, the most likely business impact is that many fraudulent transactions go undetected, leading to financial losses.

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The model has no impact on fraud detection

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The model detects all fraudulent transactions

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Many legitimate transactions are flagged as fraud

Question 11

A data scientist splits a dataset into training (80%) and test (20%). After training, the model achieves 95% accuracy on training and 60% on test. Which step should the data scientist take first?

Accepted Answer

Apply regularization. The model shows high training accuracy (95%) but significantly lower test accuracy (60%), which is a classic sign of overfitting. Regularization (Option C) directly addresses overfitting by adding a penalty term to the loss function (e.g., L1 or L2 regularization), discouraging the model from learning overly complex patterns that do not generalize. This is the first step because it targets the core issue without requiring additional data or increasing complexity.

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Collect more data

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Use cross-validation

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Increase model complexity

Question 12

An organization wants to classify support tickets into categories (billing, technical, etc.). Which type of machine learning is most suitable?

Accepted Answer

Supervised learning. Supervised learning is the correct choice because the organization has labeled historical support tickets (e.g., 'billing' or 'technical') and wants to train a model to map new tickets to these predefined categories. This is a classic classification task, where the algorithm learns from input-output pairs to predict the correct label for unseen data.

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Unsupervised learning

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Reinforcement learning

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Regression

Question 13

Which TWO techniques are commonly used to handle missing data in a dataset?

Accepted Answer

Remove rows with missing values. Removing rows with missing values is a straightforward technique to handle missing data, especially when the missingness is random and the dataset is large enough that dropping a few rows does not significantly reduce the sample size or introduce bias. Option D is correct because imputing missing values with the mean or median is a common statistical method that preserves the dataset size and is simple to implement, though it can reduce variance and may distort relationships if the data is not missing completely at random.

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Feature scaling

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One-hot encoding

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Principal component analysis (PCA)

Question 14

Which THREE factors are common causes of bias in AI systems?

Accepted Answer

Lack of diversity in the development team. A lack of diversity in the development team leads to homogeneity of thought, which can cause blind spots in identifying potential biases in data, features, or model behavior. When the team does not represent the full spectrum of end users, the AI system may inadvertently encode assumptions that disadvantage underrepresented groups, resulting in biased outcomes.

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Cross-validation

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High regularization

Question 15

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