26. The SCI data most likely exhibits which type of bias?
A. Time period
B. Data mining
C. Survivorship
Answer = C
“Capital Market Expectations,” John P. Calverley, Alan M. Meder, Brian D. Singer, and Renato
Staub
2013 Modular Level III, Vol. 3, Reading 18, Section 2.2.2
Study Session 6–18–b
Discuss in relation to capital markets expectations, the limitations of economic data, data
measurement errors and biases, the limitations of historical estimates, ex post risk as a biased
measure of ex ante risk, biases in analysts’ methods, the failure to account for conditioning
information, the misinterpretation of correlations, psychological traps, and model uncertainty.
C is correct. The SCI data is an index that is not composed of the same number of firms in each
period because of firm failures and combinations through time, which indicates survivorship
bias.
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