AAFM Exam CWM_LEVEL_2 Topic 2 Question 89 Discussion

Actual exam question for AAFM's CWM_LEVEL_2 exam

Question #: 89
Topic #: 2

Section A (1 Mark)

______________is a risk whenever a decision maker commits resources to a course of action (thereby making an ''investment'') in the hope of achieving a positive outcome and experiences disappointing results

AFraming Bias

BMental accounting

CEscalation of Commitment

DHindsight bias

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Suggested Answer: A

by Luisa at Sep 19, 2024, 12:34 PM

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Leana

3 days ago

Ah, Escalation of Commitment, the bane of rational decision-making. It's like that saying, 'When you're in a hole, keep digging!' Jokes aside, it's a crucial concept to understand in risk management.

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Marion

6 days ago

Haha, I can just imagine the decision maker here, clutching their spreadsheets and PowerPoint slides, refusing to let go of a sinking ship. Gotta love Escalation of Commitment - it's like the corporate world's version of throwing good money after bad!

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Eun

9 days ago

I was tempted to go with Framing Bias, but Escalation of Commitment just feels right here. It's that sunk cost fallacy kicking in, where we justify continued investment even when the outlook is bleak. Classic behavioral finance stuff.

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Alton

15 days ago

Hmm, this seems like a classic case of Escalation of Commitment. I've seen people stubbornly stick to a failing course of action just because they've already invested so much in it. It's a tough one to avoid, but it's important to stay objective.

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