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NEW QUESTION: 1
Which of the following correctly describes survivorship bias:
A. Survivorship bias refers to prudent and conservative risk management
B. Survivorship bias is the positive tail risk that ensures survival over the long run
C. Survivorship bias is the tendency for failed companies, markets or investments to be excluded from performance data.
D. Survivorship bias is the negative skew in returns data resulting from credits that have survived despite a high probability of default
Answer: C
Explanation:
Explanation
Survivorship bias is the tendency for failed companies, funds, investments and even entire markets (eg Russian stock market returns after the Communist revolution) to be excluded from performance studies because they no longer exist. Survivorship bias results in past results looking better than they actually were as data points relating to failures are not included.
A risk manager needs to be aware of survivorship bias when basing risk analysis on historical data and should question if failures (eg failed funds, delisted companies etc) have been included in the data he or she is relying upon.
NEW QUESTION: 2
You are the manager for a governmental portfolio aiming to restructure the roads in your country. Having a tight schedule, a large number of stakeholders including the public, in addition to a strict budgeting framework, you know that you will be managing the performance closely and that the governance board and the stakeholders would want to check on the progress and performance frequently. For this you are developing a robust performance management plan. What can you use to help you start developing this plan?
A. Portfolio Management Plan, Organizational Process Assets, Portfolio Process Assets, Portfolio
B. Portfolio Management Plan, Organizational Process Assets, Portfolio Process Assets, Enterprise Environmental Factors
C. Portfolio Management Plan, Portfolio, Portfolio Reports, Enterprise Environmental Factors
D. Portfolio Management Plan, Organizational Process Assets, Portfolio Reports, Enterprise Environmental Factors
Answer: D
NEW QUESTION: 3
During which stage of the fundamental test process is the testability of requirements evaluated?
A. Evaluating Exit Criteria and Reporting
B. Test Planning and Control
C. Test Implementation and Execution
D. Test Analysis and Design
Answer: D
Explanation:
Section: (none)