A pension fund is looking at hiring a new fund manager. One…
A pension fund is looking at hiring a new fund manager. One manager that has caught their attention has been in the top quartile of her sector for each of the past 3 years and the fund decides to make her an offer that is well above her current income based on this information. Critique this action based on the representativeness heuristic. Identify and explain at least 3 specific ways this course of action violates the laws of statistics. (5 points)