AAFM Exam CWM_LEVEL_2 Topic 6 Question 87 Discussion

Actual exam question for AAFM's CWM_LEVEL_2 exam

Question #: 87
Topic #: 6

Section B (2 Mark)

Fifteen Year ago, Sandeep set up his initial allocation in her defined contribution plan by placing an equal amount in each asset class and never changed it. Over time, he increased his contribution by 3 % per year until he reached maximum amount allowed by law. Which of the following biases that Sandeep suffers from?

ARepresentativeness Bias

BStatus Quo Bias

CAvailability Bias

DConfirmation Bias

Show Suggested Answer

Suggested Answer: D

by Latrice at Sep 19, 2024, 04:20 AM

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Ma

7 days ago

I think it's Representativeness Bias. Sandeep is assuming that the initial allocation is representative of the best strategy, even though market conditions have likely changed over time.

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Adrianna

10 days ago

Sandeep definitely has a case of Status Quo Bias. He's been sticking to the same allocation for 15 years, even though his contributions have increased. He's just too comfortable with the familiar to make changes.

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