Sash143 wrote:
Many banks charge high penalty fees on interest-bearing accounts for relatively small violations of policies that are often confusingly presented to customers. These fees do not merely compensate the banks for the trivial cost and inconvenience of these violations; the fees provide enough income to allow the banks to offer free checking accounts, which do not generate interest. If checking accounts were charged a nominal annual fee, high penalty fees would be eliminated.
Which of the following would most strengthen the argument above?
A) A recent study has shown that fewer than 1% of bank customers read all the fine print on the information with which they are presented when they open an account.
B) There is widespread perception among the general public that penalty fees on interest-bearing accounts and lines of credit are unfairly high.
C) Bank customers will not close their checking accounts if a nominal annual fee is charged to the account.
D) The cost to banks of maintaining checking accounts is expected to rise considerably because of added security expenses.
E) Consumers would not pay most of their bills through online services rather than using their existing checking accounts.
Veritas Prep OFFICIAL EXPLANATION Answer: CExplanation: The conclusion is that high penalty fees would be eliminated when banks start charging annual fees for checking accounts. If, however, customers closed their checking accounts, the banks would lose that income, giving them no incentive to discontinue charging high penalty fees. Choice C, by stating that this would NOT happen, strengthens the conclusion. You can use the Assumption Negation Technique here. The negation of this choice is “Bank customers will close their checking accounts if a nominal annual fee is charged to the account.” Well if they DO close their checking accounts, this hurts the conclusion, since the banks would not be collecting enough annual fees from checking accounts to eliminate high penalty fees.
(A) We were already told that information about penalty fees is presented confusingly. It does not strengthen the argument to say that most people don’t read the fine print.
(B) This perception does not matter. What matters is whether the fees will be eliminated. This choice is out of the scope.
(D) This actually weakens the argument, since banks will be less inclined to drop the penalty fees if their costs rise considerably.
(E) This choice might seem to strengthen the argument by saying that people will not abandon their checking accounts in favor of online services, but you can use the Assumption Negation Technique to rule this choice out. Even if people DO pay most of their bills through online services rather than using their existing checking accounts, they would still be paying the annual fees on checking accounts, thus giving the banks a reason to eliminate penalty fees. The conclusion is not harmed by denying this choice, so the choice is not an assumption.