CFA Practice Question
Whenever a hedge fund is added to the database, its historical data is also posted to the database. Usually, only favorable results of the fund are published in the database. This leads to:
A. Survivorship bias.
B. Selection bias.
C. Instant history bias.
Explanation: This leads to an incorrect or inflated presentation of the performance of the fund during their incubation period, leading to the "backfill bias" or the "instant history bias".
User Contributed Comments 4
| User | Comment |
|---|---|
| FARHANR | Why isn't the answer B? |
| sikwingo | Lol, also thought same answer |
| leon121 | selection bias refers to the tendency to exclude a certain part of a population simply because the data is not available. (in this case, data WAS available)....As a result, we cannot state that the sample we've drawn is completely random - it is random only within the subset on which historic data could be obtained |
| vrchary | ok |