FRM Part II · FRM Exam Part II · Risk Measurement and Assessment
A risk manager is running scenario analysis workshops to estimate the severity of a rare cyber-extortion event. Business experts tend to anchor on the first loss figure suggested by the most senior attendee. Which action best mitigates this bias?
Collect independent estimates from participants before any group discussion and then reconcile the differences. This limits anchoring on a senior person's first figure. Speaking first, using one expert, or relying only on internal loss history would worsen bias or ignore tail events.
- AHave participants submit independent estimates before group discussion, then reconcile differencesCorrect
- BAsk the senior attendee to state the figure first to save time
- CReplace the workshop with the bank's own internal loss history alone
- DReduce the number of participants to one expert
Explanation
Anchoring is reduced by eliciting estimates independently before discussion, as in Delphi-style approaches. Letting the senior person speak first strengthens the anchor, and internal data alone lacks tail events while one expert increases bias.
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