How do I tell cognitive errors from emotional biases on the CFA exam?

Use the correctability test. Cognitive errors are information-processing mistakes that better data, training, or a written process can usually fix. Emotional biases are feeling-driven distortions that are usually harder to argue away.

Examples that help:

• A client refuses to update beliefs after three earnings misses. That is conservatism. A written rule about updating after consecutive surprises would help. Cognitive.
• A client refuses to sell inherited stock because it feels disloyal to grandfather. That is endowment plus possibly status quo. No checklist will fix the feeling. Emotional.
• A client extrapolates one quarter into a long-term trend. That is representativeness. A discipline of looking at multiple periods would help. Cognitive.
• A client cannot sell a loser because realizing the loss "would be painful." That is loss aversion driving the disposition effect. Hard to fix with logic. Emotional.

Once you know the category, the moderation versus adaptation choice usually follows. Cognitive errors get moderation through process discipline. Emotional biases often get accommodation if wealth allows.