The paper introduces a framework that uses large language models (LLMs) to generate natural‑language narratives explaining cross‑sectional stock return predictions. It combines temporal Shapley additive explanations (SHAP) from an XGBoost model with historical regime analogs to provide context. A controlled study shows that progressively externalizing numerical and relational reasoning improves evidence faithfulness and accuracy, while historical analogs boost human‑rated usefulness.
arXiv:2606. 21678v2 Announce Type: replace-cross Abstract: Language models can generate plausible rationales for their predictions, but these explanations may not faithfully represent the model's internal reasoning.
arXiv:2607. 18271v1 Announce Type: new Abstract: Time series forecasts are widely used in decision-critical domains, where they are rarely consumed without accompanying explanations.
arXiv:2607. 00856v1 Announce Type: cross Abstract: In recent years, large language models have achieved remarkable success and have seen growing adoption in financial applications.
arXiv:2606. 24950v1 Announce Type: new Abstract: Financial decision-making is contextual: forecasting prices, valuing companies, and assessing event exposure weigh price history, accounting fundamentals, macroeconomic regime, and contemporaneous text.
The paper introduces Fact-Ablated Evaluation (FAE), a framework that iteratively removes cited evidence to test whether large language models (LLMs) adjust their fact‑checking predictions accordingly. Experiments reveal that many off‑the‑shelf LLMs rely more on internal knowledge than on the provided evidence. To address this, the authors propose REAL, a training method that uses counterfactual evidence supervision to encourage LLMs to base veracity judgments on evidence, achieving better evidence‑dependent performance across four datasets.
arXiv:2603. 19225v3 Announce Type: replace-cross Abstract: Real-world financial decision-making is a challenging problem that requires reasoning over heterogeneous signals, including company fundamentals derived from regulatory filings and trading signals computed from price dynamics.
arXiv:2609.36914v1 Announce Type: new Abstract: Post-training has been shown to significantly improve language models' performance on tasks with verifiable outcomes, including mathematical reasoning,...
arXiv:2606. 11445v1 Announce Type: new Abstract: Trust in an AI system is often anchored by explanations of how it works, which one then uses to forecast its behavior on new inputs.
Large language models fine-tuned for forecasting can be accurate yet poorly calibrated, and their chain-of-thought (CoT) reasoning may not faithfully reflect the evidence behind a forecast. We ask whether internal representations offer a more direct window into both.
arXiv:2607. 09502v1 Announce Type: cross Abstract: Explaining machine-learning models is increasingly important for decision-making and consumer trust, yet it is widely believed to come at a cost: existing Explainable AI (XAI) methods suffer from a persistent accuracy-explainability trade-off.
The paper introduces an AI economist agent that integrates large language models, retrieval‑augmented generation, knowledge graphs, and quantitative models to conduct evidence‑based economic and financial scenario analysis. The framework orchestrates LLM agents to plan analyses, retrieve relevant evidence, and structure economic mechanisms, while registered quantitative models produce numerical outcomes and predefined tests validate intermediate results for inclusion in the final report. Applied to European macro‑financial stress scenarios and bank capital analysis, the empirical study demonstrates the agent’s ability to combine flexible evidence retrieval and scenario construction while maintaining traceability to sources and explicit model calculations.
The study investigates whether adding inference-time reasoning to large language models (LLMs) improves trading performance. Using a controlled experiment across DeepSeek, GPT, and Gemini models, the authors varied reasoning effort while keeping other variables constant and evaluated over a full year of U.S. equities under three input conditions. Results show that additional reasoning does not reliably increase net portfolio returns and can even lead to nonmonotonic performance and unstable outcomes.