Which of the Following Statements Is True

question 4

Multiple Choice

Which of the following statements is true?

• A)The BIS requires banks to define an adverse change in rates as being the 95^th percentile.
• B)The BIS requires banks to define an adverse change in rates as being the 97.5^th percentile.
• C)The BIS requires banks to define an adverse change in rates as being the 99^th percentile.
• D)The BIS requires banks to define an adverse change in rates as being the 99.5^th percentile.

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Definitions:

Preference

An individual's choice or predilection towards certain ideas, objects, or outcomes over others.

Error Management Theory

A theory suggesting that humans and other animals have evolved biases in judgement and decision-making processes to avoid more costly errors.

Omission Bias

The tendency to take whatever course of action does not require you to do anything (also called the default option).

Status Quo Bias

A cognitive bias favoring the existing state of affairs or the current baseline (the "status quo"), often leading to resistance against change.