ML4T Exam 2 - Part 1 (1-159) ACTUAL UPDATED QUESTIONS AND CORRECT
ANSWERS
Question 1: Why did it become a good investment to bet Correct Answer: D
against mortgage-backed securities.
A) The default rate on the mortgages kept rising.
B) Rating agencies were accurately assigning ratings.
C) Banks were incentivized to issue more and more
mortgages.
D) A and C
Question 2: In terms of the fundamental law, when aiming Correct Answer: C
for high performance, you can make up for low skill with
___.
A) low breadth
B) low sharpe ratio
C) high breadth
D) high volatility
Question 3: Is Bollinger Bands a leading indicator? Correct Answer: B
A) Yes
B) No, Bollinger Bands is a lagging indicator
C) No, Bollinger Bands is not an indicator
D) No, Bollinger bands is neither a leading or a lagging
indicator
Question 8: Which statement is true regarding the Correct Answer: A
Fundamental Law of Portfolio Management?
A) IR = IC * sqrt(BR)
B) IC = IR * sqrt(BR)
C) BR = IC * IR
D) IR = IC + sqrt(BR)
, Question 10: What does CDS stand for? Correct Answer: B
A) Collateralized Debt Swap
B) Credit Default Swap
C) Collateralized Debt Security
D) Credit Default Security
Question 15: Which celebrity chef and "Kitchen Correct Answer: D
Confidential" author explains collateralized debt
obligations (CDOs) by comparing them to fish stew?
A) Gordon Ramsay
B) Mario Batali
C) Thomas Keller
D) Anthony Bourdain
Question 17: In Reinforcement Learning, the default MDP Correct Answer: D
has an assumption of infinite horizons to overcome that,
we introduce a concept of _____ rewards. Multiplying
the reward by λ raised to t. Where λ's limits are ___< λ <=___.
A) [reduced , -1, 1]
B) [reduced, 0 , 1]
C) [discounted, -1, 1]
D) [discounted, 0 , 1]
Question 24: Which of the following statements about Correct Answer: C
Dyna is true?
A) Dyna is a model-free based method.
B) Dyna is the basis for Q-Learning.
C) Dyna is a blend of model-free and model-based
methods
D) Dyna is more expensive than Q-Learning
Question 37: Given 2 companies have same Information Correct Answer: A
Ratio Company A has algorithm 100 time smarter than
Company B Company A trades for 20 days a year How
many trades does company B need to execute?
A) 200000
B) 20000
C) 2000000
D) 2000
Question 45: The discount factor allows us to value: Correct Answer: C
A) Helps to achieve maximum returns over long term
B) long-term reward more than short term reward
C) short-term reward more than long-term ones
D) None of the above
ANSWERS
Question 1: Why did it become a good investment to bet Correct Answer: D
against mortgage-backed securities.
A) The default rate on the mortgages kept rising.
B) Rating agencies were accurately assigning ratings.
C) Banks were incentivized to issue more and more
mortgages.
D) A and C
Question 2: In terms of the fundamental law, when aiming Correct Answer: C
for high performance, you can make up for low skill with
___.
A) low breadth
B) low sharpe ratio
C) high breadth
D) high volatility
Question 3: Is Bollinger Bands a leading indicator? Correct Answer: B
A) Yes
B) No, Bollinger Bands is a lagging indicator
C) No, Bollinger Bands is not an indicator
D) No, Bollinger bands is neither a leading or a lagging
indicator
Question 8: Which statement is true regarding the Correct Answer: A
Fundamental Law of Portfolio Management?
A) IR = IC * sqrt(BR)
B) IC = IR * sqrt(BR)
C) BR = IC * IR
D) IR = IC + sqrt(BR)
, Question 10: What does CDS stand for? Correct Answer: B
A) Collateralized Debt Swap
B) Credit Default Swap
C) Collateralized Debt Security
D) Credit Default Security
Question 15: Which celebrity chef and "Kitchen Correct Answer: D
Confidential" author explains collateralized debt
obligations (CDOs) by comparing them to fish stew?
A) Gordon Ramsay
B) Mario Batali
C) Thomas Keller
D) Anthony Bourdain
Question 17: In Reinforcement Learning, the default MDP Correct Answer: D
has an assumption of infinite horizons to overcome that,
we introduce a concept of _____ rewards. Multiplying
the reward by λ raised to t. Where λ's limits are ___< λ <=___.
A) [reduced , -1, 1]
B) [reduced, 0 , 1]
C) [discounted, -1, 1]
D) [discounted, 0 , 1]
Question 24: Which of the following statements about Correct Answer: C
Dyna is true?
A) Dyna is a model-free based method.
B) Dyna is the basis for Q-Learning.
C) Dyna is a blend of model-free and model-based
methods
D) Dyna is more expensive than Q-Learning
Question 37: Given 2 companies have same Information Correct Answer: A
Ratio Company A has algorithm 100 time smarter than
Company B Company A trades for 20 days a year How
many trades does company B need to execute?
A) 200000
B) 20000
C) 2000000
D) 2000
Question 45: The discount factor allows us to value: Correct Answer: C
A) Helps to achieve maximum returns over long term
B) long-term reward more than short term reward
C) short-term reward more than long-term ones
D) None of the above
