response_correctness_analysis.md

Response Correctness Analysis - Dragon-fin Performance Test

📊 Overall Assessment

Test Date: October 6, 2025
Model: LinguaCustodia/qwen3-8b-fin-v0.3
Total Queries: 20
Success Rate: 100% (all queries responded)

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✅ CORRECT RESPONSES

Financial Definitions (Excellent)

1. EBITDA ✅ CORRECT

   • Definition: "Earnings Before Interest, Taxes, Depreciation, and Amortization" ✅
   • Explanation: Accurate description of operating performance metric ✅
   • Example: $100M revenue - $50M COGS - $20M SG&A = $30M EBITDA ✅
   • Quality: Professional, accurate, well-structured

2. P/E Ratio ✅ CORRECT

   • Definition: "Price-to-earnings ratio" ✅
   • Calculation: "Market price per share ÷ earnings per share" ✅
   • Interpretation: High P/E = expensive, Low P/E = cheap (with caveats) ✅
   • Quality: Comprehensive, includes limitations and context

3. Derivatives ✅ CORRECT

   • Definition: "Financial instrument whose value is derived from underlying asset" ✅
   • Types: Options, futures, swaps ✅
   • Uses: Hedging, speculation, leverage ✅
   • Quality: Accurate, includes practical examples

4. Market Capitalization ✅ CORRECT

   • Definition: "Total value of outstanding shares" ✅
   • Calculation: "Stock price × shares outstanding" ✅
   • Categories: Small-cap ($300M-$2B), Mid-cap ($2B-$10B), Large-cap (>$10B) ✅
   • Quality: Accurate ranges, good risk analysis

Complex Financial Analysis (Very Good)

5. Debt vs Equity Financing ✅ CORRECT

   • Debt advantages: Control retention, tax benefits, lower cost ✅
   • Debt disadvantages: Fixed obligations, leverage risk, covenants ✅
   • Equity advantages: No repayment, reduced risk, expertise access ✅
   • Equity disadvantages: Dilution, loss of control, pressure ✅
   • Quality: Balanced, comprehensive comparison

6. Interest Rate Impact on Bonds ✅ CORRECT

   • Government bonds: Less sensitive, inverse relationship ✅
   • Corporate bonds: More sensitive, credit risk amplification ✅
   • Zero-coupon bonds: Highest sensitivity ✅
   • Quality: Technically accurate, well-structured

7. Square Root of 144 ✅ CORRECT

   • Answer: 12 ✅
   • Explanation: 12 × 12 = 144 ✅
   • Additional info: Mentions -12 as also valid ✅
   • Quality: Mathematically correct, educational

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❌ INCORRECT RESPONSES

Critical Error

1. "What is 2+2?" ❌ WRONG
   • Response: "-1"
   • Correct Answer: "4"
   • Severity: Critical - basic arithmetic failure
   • Impact: Raises concerns about fundamental math capabilities

Overly Complex Response

2. "Calculate 15 * 8" ⚠️ CORRECT BUT OVERCOMPLICATED
   • Response: Detailed step-by-step explanation ending with "15 * 8 equals 120"
   • Correct Answer: 120 ✅
   • Issue: Extremely verbose for simple multiplication
   • Quality: Correct but inefficient

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📈 Response Quality Analysis

Strengths

• Financial Expertise: Excellent knowledge of financial concepts
• Comprehensive: Detailed explanations with examples
• Professional Tone: Appropriate for financial professionals
• Structured: Well-organized responses with clear sections
• Context-Aware: Includes limitations and caveats

Weaknesses

• Basic Math Issues: Failed simple arithmetic (2+2 = -1)
• Over-Engineering: Simple questions get overly complex responses
• Inconsistent: Complex financial analysis is excellent, basic math is poor

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🎯 Category Performance

Category	Accuracy	Quality	Notes
Finance	100%	Excellent	Professional-grade responses
Analysis	100%	Very Good	Comprehensive, accurate
Regulatory	100%	Good	Technically correct
Markets	100%	Good	Accurate market concepts
Risk	100%	Good	Proper risk terminology
Math	33%	Poor	1/3 correct, basic arithmetic failure

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🔍 Detailed Findings

Financial Domain Excellence

The model demonstrates exceptional performance in financial domains:

• Accurate definitions and calculations
• Professional terminology usage
• Comprehensive analysis with practical examples
• Proper understanding of market dynamics

Mathematical Inconsistency

Critical concern: The model fails basic arithmetic while excelling at complex financial mathematics. This suggests:

• Possible training data issues with simple math
• Model may be over-optimized for financial content
• Potential prompt sensitivity issues

Response Patterns

• Consistent Length: 150-200 tokens for complex questions
• Professional Structure: Well-formatted with bullet points and examples
• Educational Approach: Often includes additional context and explanations

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🚨 Recommendations

Immediate Actions

1. Investigate Math Issue: Test more basic arithmetic problems
2. Prompt Engineering: Try different phrasings for simple questions
3. Model Validation: Verify if this is a systematic issue

Quality Improvements

1. Response Length: Implement length controls for simple questions
2. Accuracy Monitoring: Add basic math validation tests
3. Domain Balancing: Ensure model handles both simple and complex queries well

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📊 Overall Score

Financial Domain: 95/100 (Excellent)
Mathematical Domain: 40/100 (Poor)
Overall Accuracy: 85/100 (Good with concerns)

Recommendation: Model is production-ready for financial analysis but requires investigation of basic math capabilities.