Generative AI Interview Questions and Answers

 

1.     Can you explain the key differences between Generative AI and Large Language Models (LLMs)? How do they differ in terms of capabilities and scope?

Answer: Generative AI refers to a broad class of models capable of creating content across various formats, such as text, images, audio, and even code. These models learn patterns from vast datasets and can generate new content by mimicking those patterns. For example, they can generate realistic images or compose music. In contrast, Large Language Models (LLMs) are a specific subset of generative AI focused on natural language processing. They are trained on extensive amounts of text data to understand the structure and semantics of human language. LLMs excel at generating coherent text, answering questions, summarizing documents, and performing language translation. The key distinction is that generative AI covers multiple content types, while LLMs are specialized in generating and understanding text.

2.What are the primary use cases of LLMs in the financial sector? Can you discuss a specific example where LLMs can add value?

Answer: LLMs have a wide range of applications in finance, such as:

·         Personalized Financial Advice: Analyzing clients’ financial data to generate tailored investment strategies and advice.

·         Real-Time Fraud Detection: Monitoring transaction patterns to detect anomalies and flag potential fraud.

·         Automated Compliance Reporting: Generating regulatory reports to ensure compliance with changing regulations.

·         AI Chatbots for Customer Support: Enhancing customer service by providing instant, accurate responses to payment or account-related inquiries.

·         Predictive Market Risk Management: Analyzing trends to predict market changes and manage risks.

For example, LLMs can help banks offer personalized financial advice by analyzing a client’s spending habits, investment portfolio, and long-term financial goals. The model can then suggest investment options or savings plans, increasing client satisfaction and engagement.

3.Explain the concept of Parameter-Efficient Fine-Tuning (PEFT) and how Low-Rank Adaptation (LoRA) optimizes the fine-tuning process.

Answer: Parameter-Efficient Fine-Tuning (PEFT) optimizes the process of adapting large pre-trained models for specific tasks without retraining all the parameters. Instead of updating the entire model, PEFT focuses on adjusting only a small subset of parameters, which reduces computational costs and memory usage. Low-Rank Adaptation (LoRA) is a popular PEFT technique that introduces low-rank matrices to decompose the weight matrix into a sum of the original weights and a product of smaller matrices. This reduces the number of parameters to be fine-tuned. LoRA is particularly effective in scenarios where domain-specific adaptation is needed, such as fine-tuning a general-purpose LLM for legal or medical text processing.

4.What is Retrieval-Augmented Generation (RAG), and how does it improve the accuracy of LLM outputs? Provide a real-world application where RAG would be beneficial.

 

Answer: Retrieval-Augmented Generation (RAG) combines information retrieval with content generation. Unlike standard LLMs that generate responses based solely on their training data, RAG can access an external knowledge base to pull in the most relevant information in real-time. This retrieval step ensures that the generated responses are accurate and up-to-date.

A real-world application is in financial analysis, where a RAG model can generate reports based on the latest financial news, regulatory updates, and market data. For instance, when analyzing the impact of recent interest rate hikes, RAG can retrieve the most current economic reports and combine that information with its internal knowledge to produce a comprehensive analysis.

5.Can you describe how Agentic RAG differs from standard RAG and how it enhances the decision-making process in complex queries?

Answer: Agentic RAG extends the capabilities of standard RAG by incorporating intelligent agents that perform multi-step reasoning, planning, and decision-making. While traditional RAG focuses on retrieving information and generating text, Agentic RAG uses agents that can interact with external tools, perform calculations, and even refine their own queries to gather more detailed information. These agents can break down complex tasks, compare multiple documents, and generate in-depth analyses.

For example, in the context of financial due diligence, Agentic RAG can use multiple agents to retrieve financial statements, market analysis reports, and legal documents, then synthesize the data to generate a thorough risk assessment report.

6.What are the advantages and disadvantages of using full fine-tuning for LLMs, especially in domain-specific applications?

Answer: Advantages:

·         Model Customization: Full fine-tuning adapts the model entirely to a specific task, improving performance on specialized datasets.

·         Improved Accuracy: By updating all weights, the model can capture intricate task-specific patterns, resulting in higher accuracy.

Disadvantages:

·         High Resource Requirements: Full fine-tuning is computationally intensive, requiring substantial memory and processing power.

·         Time-Consuming: Training can be slow, especially for large models, and may require specialized hardware like GPUs.

·         Risk of Overfitting: If the fine-tuning dataset is too narrow, the model might overfit and lose its generalization capabilities.

7.How does Chain-of-Thought (CoT) prompting enhance the performance of LLMs in complex problem-solving tasks? Can you provide an example of where this technique would be effective?

Answer: Chain-of-Thought (CoT) prompting improves an LLM’s performance by breaking down a complex problem into intermediate reasoning steps, allowing the model to solve it more systematically. Instead of trying to generate a response in one go, the model is guided through a series of steps, which helps in solving problems that require logical thinking and structured responses.

For example, CoT prompting is particularly effective in financial forecasting. When predicting stock prices, the model can first analyze historical trends, then factor in macroeconomic indicators, and finally evaluate recent company performance reports. This step-by-step breakdown leads to more accurate and insightful predictions.