What if the bankers who were making all those dodgy loans in the preceding decade had undergone regular calibration testing? ------------------------------------------------------------------------- Did you hear about the men who keep buying and selling a crate of herring, each time at a profit, until the last buyer opens a can of the stuff and tastes it. "This herring is awful!" he exclaims. "It's rancid!" "Of course," the man who sold it to him says. "It's not for eating; it's for buying and selling."
I think that the way that they score the test is simplistic and flawed. But the idea is what intrigued me. That being that some people will be better at self-assessing the accuracy of their own beliefs than others. I think the idea is that people who tend to be certain that they are right when they are actually wrong are not as qualified to judge risk. Or something like that.
If a competitior is writing alt a loans and making tons of money, you have considered it too risky. In the meantime, you are losing business and quite certain to be put out of business if you do not do the same. Now what? How will being aware of risk intelligence avoid the consequences? You are being forced in or out.
Interesting test. I got a 20. I scored badly because I answered a low % for most of the statements. My thinking was if I'm unsure on a highly detailed and specific statement, for example "Commodore Matthew Perry compelled the opening of Japan to the West with the Convention of Kanagawa in 1870", then it has a very high probability of being untrue. Look at all the possibilities in that statement. It could be a different commodore. It could be a sailor of a different rank. It could be a different country. The convention could have a different name. The entire statement could even be completely fictional. Seems much more logical to give it a 0% than a 50%. Even if I knew all but one detail to be true, it would still be most likely to be untrue. For instance, if I knew everything but the guy's name. How many names are there? Way more than 10. Still have to give it a 0%. Maybe the test would be better if it didn't have such highly specific statements. Statements like "X is bigger than Y" would be better, for example.