Model Risk Management (SR 11-7) and AI Quiz

Answers and explanations appear as you take the quiz.

1. Which OCC document was issued alongside the Federal Reserve's SR 11-7 in 2011?
   • OCC Bulletin 2013-29
   • The Comptroller's Handbook on Liquidity
   • OCC Bulletin 2011-12
   • OCC Interpretive Letter 1170
2. What are the three core elements of validation under SR 11-7?
   • Evaluating conceptual soundness, ongoing monitoring, and outcomes analysis
   • Data collection, model training, and deployment
   • Board approval, vendor certification, and annual audit
   • Stress testing, capital planning, and liquidity review
3. What does SR 11-7 require for review to count as "effective challenge"?
   • That the model developer approves their own work
   • That a vendor certifies the model
   • That the model passes a public benchmark
   • That reviewers are objective, informed, competent and have enough influence to force changes
4. How should a bank handle a vendor model whose proprietary details are withheld?
   • Exempt it from validation because the vendor is responsible
   • Rely more on sensitivity analysis, benchmarking and outcomes testing
   • Use it only for internal reporting
   • Replace it with a model built in-house immediately
5. According to the guide, which of these is part of an LLM application's model boundary for change management?
   • The bank's office locations
   • The customer's device type
   • The system prompt and retrieval corpus
   • The validator's job title
6. Why does the guide recommend running repeated samples when testing an LLM?
   • Its outputs can vary between runs, so the spread needs to be measured
   • Regulators require exactly ten runs
   • Repeated runs make the model more accurate
   • It reduces the vendor's licensing fees
7. Why does the guide say SR 11-7 applies to AI even though it was written in 2011?
   • Congress amended it in 2023
   • Its definition of a model is technology-neutral
   • It names neural networks explicitly
   • AI vendors requested it
8. When did the FDIC adopt the SR 11-7 model risk guidance?
   • 2008
   • 2011
   • 2014
   • 2017