ML4T EXAM 2 PART 3 (324-472) QUESTIONS WITH
VERIFIED ACCURATE ANSWERS 2026
Question 324: In Reinforcement Learning, which of the following parameter can either
be a STATE or a REWARD?
A) Bollinger Value
B) Return from Trade
C) Daily Returns
D) Holding Long - Answers -Correct Answer: C
Question 332: In order to ensure that assets value increases in low-risk portfolio,assets
should be A:anti-correlated in short term B:positively correlated in long term.
A) A
B) B
C) Both A and B
D) None of the above - Answers -Correct Answer: C
Question 334: What is the main advantage of a model-free approach like Q-Learning?
A) Q-Learning does not require look-ahead or careful weighting
B) Q-Learning can easily be applied to domains where all states and/or transitions are
not fully defined
C) Q-Learning implementations are generally faster than modelbases approaches
D) Q-Learning is the best way to avoid overfitting - Answers -Correct Answer: B
Question: Standard deviation of daily returns is usually used as a measure of risk.
Among the options below, which one would be the best alternative way to measure
risk?
A) Cumulative return
B) Momentum
C) Alpha
D) Beta - or something else like Sortino Ratio - Answers -Correct Answer: D
Question 341: What is one major difference between US style stock options and
European style stock options?
A) US style stock options require you to exercise the option on the expiration date,
whereas European allow you to exercise the option prior to the expiration date.
B) European options do not call it a strike price.
C) US style stock options allow you to exercise the option up to and including the
expiration date, whereas European options only allow you to exercise the option on the
expiration date.
D) None of the above. - Answers -Correct Answer: C
Question 344: Which one of the statements below is correct considering moving
average?
, A) A moving average helps remove daily fluctuation from analysis.
B) The shorter the time period under consideration, the easier it is to predict long-term
trends.
C) The longer the time period under consideration, the more sensitive the moving
average is towards daily volatility.
D) A moving average is always computed using the same arithmetic model. - Answers -
Correct Answer: A
Question 348: Which of the following is NOT part of Fundamental Analysis?
A) Dividends
B) Company Earnings
C) Company Debt
D) Trading Volumne - Answers -Correct Answer: D
Question 349: Which of the following is a correct way to desrcibe the Transition function
T[s,a,s'] in Markov Decision Problems (MDP)?
A) probability that we are in state s' and we take action a, we get new state s
B) probability that we are in state a and we take action s, we get new state s'
C) probability that we are in state s and we take action s', we get new state a
D) probability that we are in state s and we take action a, we get new state s' - Answers
-Correct Answer: D
Question 351: If I have insider information that I am able to use to make a profit off
through trading, which form(s) of the Efficient Markets Hypothesis (EMH) could apply?
A) Weak form
B) Semi-strong form
C) Strong form
D) A and B - Answers -Correct Answer: D
Question 355: Which of the following best describes the factors taken into account in
Technical Analysis ?
A) Technical Analysis looks only at Historical Price of the stock
B) Technical Analysis looks only at Historical Price and Volume of the stock
C) Technical Analysis looks at Book Value,Cash Flow and Dividends of the stock
D) Technical Analysis looks only at Volume of the stock - Answers -Correct Answer: B
Question 357: Mean Variance Optimization (MVO) uses a set of inputs to return a set of
asset weights that minimize risk. Which of the following inputs is NOT used in the
calculation of MVO?
A) Expected Return
B) Volatility
C) Sharpe Ratio
D) All of the above are used as inputs - Answers -Correct Answer: C
Question 358: According to Black-Scholes Option Pricing Model, which one of the
following assumptions isn't true?
VERIFIED ACCURATE ANSWERS 2026
Question 324: In Reinforcement Learning, which of the following parameter can either
be a STATE or a REWARD?
A) Bollinger Value
B) Return from Trade
C) Daily Returns
D) Holding Long - Answers -Correct Answer: C
Question 332: In order to ensure that assets value increases in low-risk portfolio,assets
should be A:anti-correlated in short term B:positively correlated in long term.
A) A
B) B
C) Both A and B
D) None of the above - Answers -Correct Answer: C
Question 334: What is the main advantage of a model-free approach like Q-Learning?
A) Q-Learning does not require look-ahead or careful weighting
B) Q-Learning can easily be applied to domains where all states and/or transitions are
not fully defined
C) Q-Learning implementations are generally faster than modelbases approaches
D) Q-Learning is the best way to avoid overfitting - Answers -Correct Answer: B
Question: Standard deviation of daily returns is usually used as a measure of risk.
Among the options below, which one would be the best alternative way to measure
risk?
A) Cumulative return
B) Momentum
C) Alpha
D) Beta - or something else like Sortino Ratio - Answers -Correct Answer: D
Question 341: What is one major difference between US style stock options and
European style stock options?
A) US style stock options require you to exercise the option on the expiration date,
whereas European allow you to exercise the option prior to the expiration date.
B) European options do not call it a strike price.
C) US style stock options allow you to exercise the option up to and including the
expiration date, whereas European options only allow you to exercise the option on the
expiration date.
D) None of the above. - Answers -Correct Answer: C
Question 344: Which one of the statements below is correct considering moving
average?
, A) A moving average helps remove daily fluctuation from analysis.
B) The shorter the time period under consideration, the easier it is to predict long-term
trends.
C) The longer the time period under consideration, the more sensitive the moving
average is towards daily volatility.
D) A moving average is always computed using the same arithmetic model. - Answers -
Correct Answer: A
Question 348: Which of the following is NOT part of Fundamental Analysis?
A) Dividends
B) Company Earnings
C) Company Debt
D) Trading Volumne - Answers -Correct Answer: D
Question 349: Which of the following is a correct way to desrcibe the Transition function
T[s,a,s'] in Markov Decision Problems (MDP)?
A) probability that we are in state s' and we take action a, we get new state s
B) probability that we are in state a and we take action s, we get new state s'
C) probability that we are in state s and we take action s', we get new state a
D) probability that we are in state s and we take action a, we get new state s' - Answers
-Correct Answer: D
Question 351: If I have insider information that I am able to use to make a profit off
through trading, which form(s) of the Efficient Markets Hypothesis (EMH) could apply?
A) Weak form
B) Semi-strong form
C) Strong form
D) A and B - Answers -Correct Answer: D
Question 355: Which of the following best describes the factors taken into account in
Technical Analysis ?
A) Technical Analysis looks only at Historical Price of the stock
B) Technical Analysis looks only at Historical Price and Volume of the stock
C) Technical Analysis looks at Book Value,Cash Flow and Dividends of the stock
D) Technical Analysis looks only at Volume of the stock - Answers -Correct Answer: B
Question 357: Mean Variance Optimization (MVO) uses a set of inputs to return a set of
asset weights that minimize risk. Which of the following inputs is NOT used in the
calculation of MVO?
A) Expected Return
B) Volatility
C) Sharpe Ratio
D) All of the above are used as inputs - Answers -Correct Answer: C
Question 358: According to Black-Scholes Option Pricing Model, which one of the
following assumptions isn't true?
