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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Adrianna

1 months ago

Status Quo Bias, no doubt. Sandeep's stuck in his ways like a stubborn mule. Maybe he's just afraid of change, or maybe he's too lazy to rebalance. Either way, he's missing out on potential growth.

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Clorinda

2 months ago

I'm going with Status Quo Bias too. Sandeep's unwillingness to adjust his allocation despite increasing contributions is a textbook example. Though I'm a little jealous he's maxing out his contributions - must be nice!

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Chantell

2 months ago

Haha, Sandeep must be a big fan of the 'set it and forget it' approach. Looks like he's suffering from a classic case of Status Quo Bias. Someone get this guy a financial advisor, stat!

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Georgiann

3 days ago

C) Availability Bias

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Dorthy

4 days ago

B) Status Quo Bias

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Lashonda

10 days ago

A) Representativeness Bias

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2 months 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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