Understand Regulatory Frameworks CY0-001 Practice Questions (Page 1)

Questions 1–5

1. 1application · medium

   A compliance officer at a multinational AI company is responsible for tracking regulatory changes. The company operates in the EU, the UK, and the US. Which approach is most effective for monitoring and interpreting updates to AI regulations?

   • AOnly review regulations once a year during the annual compliance audit.
   • BRely on news articles and social media posts for regulatory updates.
   • CSubscribe to official regulatory publications and participate in industry working groups.
   • DWait for regulators to contact the company directly about changes.
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2. 2expert · hard

   An AI ethics committee is evaluating a predictive policing system that uses historical crime data. The system is likely to perpetuate racial bias because historical data reflects biased policing practices. The committee must decide whether to deploy the system. Which action best balances ethical considerations with regulatory compliance?

   • ADeploy the system without changes because it is technically accurate.
   • BDeploy the system but require human oversight and regular bias audits.
   • CDeploy the system and rely on the legal team to defend any claims of discrimination.
   • DReject the system entirely because it cannot be made fair.
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4. 3application · medium

   A financial services company is developing an AI model to approve credit applications. The company operates in the EU and is subject to GDPR. During model development, the data science team wants to use a large dataset containing sensitive personal data (e.g., ethnicity, health status) to improve model accuracy. The legal team has raised concerns about GDPR compliance. Which approach best aligns the AI development process with GDPR requirements?

   • AAnonymize the dataset completely so that GDPR no longer applies, then use it for model training.
   • BConduct a Data Protection Impact Assessment (DPIA) and implement technical measures such as pseudonymization and access controls before using the sensitive data.
   • CObtain a BAA from the data provider to ensure GDPR compliance for the sensitive data.
   • DUse the sensitive data without restriction because the company has a legitimate interest in preventing fraud.
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5. 4application · medium

   A multinational AI company is developing a facial recognition system for use in public spaces. The company plans to deploy the system in the EU and the US. Which regulatory difference is most likely to affect the deployment?

   • AThe US requires a DPIA for all facial recognition deployments, while the EU does not.
   • BThe EU has proposed regulations that restrict the use of real-time facial recognition in public spaces, while the US has no federal law specifically banning it.
   • CThe EU prohibits all facial recognition technology, while the US allows it without restriction.
   • DThere are no significant regulatory differences between the EU and the US for facial recognition.
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6. 5foundation · easy

   How do ethical principles, such as fairness and transparency, influence AI regulatory frameworks?

   • AThey are used to exempt AI systems from compliance if they are deemed ethical
   • BThey help shape the requirements and standards that regulations impose on AI systems
   • CThey replace the need for formal regulations because ethics alone are sufficient
   • DThey are only relevant for academic research and have no impact on actual regulations
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