A hallucination is plausible-sounding but false or unsupported content generated with confidence. Because LLMs generate likely next words rather than retrieve verified facts, an invented CEO quote or misstated financial metric can mislead investment decisions. Treat generated signals as hypotheses to verify, not proof. section 3.1.3 section 11.1.1
Retrieval-Augmented Generation (RAG) can ground responses in trustworthy facts, but it does not eliminate hallucinations. Outdated or irrelevant retrieved documents can still produce wrong answers, so reliable ingestion and retrieval matter. section 3.1.3
Investment research
A model may confidently invent a CEO quote or misrepresent a financial metric. Verify such claims rather than relying on their fluency; source visibility and objective prompt guardrails can support transparency and control. section 11.1.1 section 2.5.2
