Social psychology comes into the picture here, because the answer that
a truthful CFO would offer is plainly ridiculous. A CFO who informs his
colleagues that “ there is a good chance that the S&P returns will be between
-10% and +30%” can expect to be laughed out of the room. The wide confidence
Interval is a confession of ignorance, which is not socially acceptable
for someone who is paid to be knowledgeable in financial matters.
Even if they knew how little they know. The executives would be penalized
for admitting it. President Truman famously asked for a “one armed economist”
who would take a clear stand; he was sick and tired of economists
who kept saying, “On the other hand…”