Find all School-related info fast with the new School-Specific MBA Forum

 It is currently 28 Nov 2015, 19:26

### GMAT Club Daily Prep

#### Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized
for You

we will pick new questions that match your level based on your Timer History

Track

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History

# Events & Promotions

###### Events & Promotions in June
Open Detailed Calendar

# The fiscal year--- yet another new Praradox Q from gmatclub

Author Message
TAGS:
Retired Moderator
Status: worked for Kaplan's associates, but now on my own, free and flying
Joined: 19 Feb 2007
Posts: 3007
Location: India
WE: Education (Education)
Followers: 377

Kudos [?]: 3115 [2] , given: 301

The fiscal year--- yet another new Praradox Q from gmatclub [#permalink]  14 Nov 2013, 00:23
2
KUDOS
Expert's post
00:00

Difficulty:

45% (medium)

Question Stats:

68% (03:02) correct 32% (02:18) wrong based on 275 sessions

The fiscal year (April to March) ended 2010-2011 was a bumper year for Sindian Bank as far as profits were concerned. On total revenue of income interest and non-income interest of $4B, the net profits stood at$1.3B. In contrast, the previous fiscal’s profits (2009 -2010 net profits were hardly $600M on revenues of$4.2B. Investors felt after the new fiscal’s financial results were declared that, that the bank was riding a high wave while the analysts were not enthused. They decried that the bonanza of 2010-2011 was a flash in the pan.

Which of the following events, if true, can prove that the analysts were indeed right in their paradoxical findings?

A. The RBI appointed a new chairman cum MD in April 2011 for the said Bank.
B. During October 2010 to Feb 2014 the high-fly new banking chairman took on business exploration trips from Alaska to Antarctica, from Jamaica to Bangkok and from Alps to Andes, resulting in an expenditure of $300M and some old customers withdrawing their deposits. C. In June 2009, The national Housing Bank, an overseer bank for institutions that offer housing finance, impounded$800M as doubtful assets on some difference of opinion about definition of doubtful assets, which was ordered to be released by the Supreme Court in December 2010.
D. In order improve business; the New chairman sanctioned $2B worth loans to some film production units, whose films bombed at box-office. E. The old chairman of the bank was elevated to the post of Deputy Governor of Reserve bank following his transfer from Sindian Bank [Reveal] Spoiler: OA _________________ Last edited by daagh on 25 Nov 2013, 07:27, edited 2 times in total. Formatting for verbal CR project  Kaplan GMAT Prep Discount Codes Knewton GMAT Discount Codes Manhattan GMAT Discount Codes SVP Joined: 06 Sep 2013 Posts: 2036 Concentration: Finance GMAT 1: 770 Q0 V Followers: 35 Kudos [?]: 394 [0], given: 355 Re: The fiscal year--- yet another new Praradox Q from gmatclub [#permalink] 09 May 2014, 07:28 Mr. Daagh, could we get the OE for this one please? I went with C by POE, but I think that the answer choice is still a bit of a stretch Please advice Cheers! J SVP Joined: 06 Sep 2013 Posts: 2036 Concentration: Finance GMAT 1: 770 Q0 V Followers: 35 Kudos [?]: 394 [0], given: 355 Re: The fiscal year--- yet another new Praradox Q from gmatclub [#permalink] 31 May 2014, 14:16 Give the freaking OE please!! Cheers J Senior Manager Joined: 07 Apr 2012 Posts: 464 Followers: 1 Kudos [?]: 31 [0], given: 58 Re: The fiscal year--- yet another new Praradox Q from gmatclub [#permalink] 10 Jun 2014, 08:27 jlgdr wrote: Give the freaking OE please!! Cheers J Now that you know you're right, can you explain how you got to your solution? Senior Manager Joined: 28 Apr 2014 Posts: 291 Followers: 0 Kudos [?]: 26 [1] , given: 46 Re: The fiscal year--- yet another new Praradox Q from gmatclub [#permalink] 14 Jun 2014, 02:59 1 This post received KUDOS jlgdr wrote: Give the freaking OE please!! Cheers J Let me try and give my explanation for this one. First let us identify what the question is asking. At its simplest , it is asking for a supporting evidence ( of event) to confirm analyst's finding. Now what was the analyst finding - it was that the profit was a fluke/flash in a pan/not something which might happen again on a sustainable basis. Now analysing the options a) RBI appointed a new chairman / MD for the bank -- Agree that this will not happen every year so the once off profit could be attributed to the initial euphoria of a new head honcho but still not 100% conclusive. Will keep it in contention. b) high profile business trips , old customers leaving the bank -- This , if not anything is contrary to the fact that there would have been profits . so out right rejected. c) Release of funds - Some funds which were wrongfully taken from the bank in past were released this year thereby contributing to its bottom line. Looks like a very strong contender to support the claim of analyst that this won't happen evey year . d) Film funding -- Starts on a good note but the bombing of the films is contrary to the fact that banks had a profit this year. e) Old chairman elevated to Deputy governor -- Like a this is a once off event which potentially could cause the bank to show temporary profits , for eg - stocks of the bank rising in values because of investors speculating that the new deputy governor might issue policies in support of his old org. Now we see that a, c and e are the possible candidates to explain the analyst's paradoxical thoughts. Out of these 3 , only c is conclusive , fact ridden so I would choose c. A and E are giving vague indicators and need to be supplemented by extra assumptions to explain the profit of the bank. Hope this helps Intern Joined: 28 Mar 2014 Posts: 23 Location: India GPA: 3 WE: Business Development (Retail Banking) Followers: 0 Kudos [?]: 7 [0], given: 17 Re: The fiscal year--- yet another new Praradox Q from gmatclub [#permalink] 14 Jun 2014, 03:35 The answer seems to be C. The revenue in 10-11 did not increase and was only 4 b while profit increased to 1.3 B. In 09-10 revenue was more 4.28b but profit was just 600 M. Option C explains clearly the paradox by giving the source of increase in profits without increasing revenue. Current Student Status: After a long voyage, land is visible. Joined: 22 Mar 2013 Posts: 991 Location: India GPA: 3.51 WE: Information Technology (Computer Software) Followers: 130 Kudos [?]: 930 [0], given: 224 Re: The fiscal year--- yet another new Praradox Q from gmatclub [#permalink] 20 Jul 2014, 02:58 where grammer is going in this question. what "that, that" is doing in last sentence of the argument. _________________ Piyush K ----------------------- Our greatest weakness lies in giving up. The most certain way to succeed is to try just one more time. ― Thomas A. Edison Don't forget to press--> Kudos My Articles: 1. WOULD: when to use? | 2. All GMATPrep RCs (New) Tip: Before exam a week earlier don't forget to exhaust all gmatprep problems specially for "sentence correction". Manager Joined: 29 May 2013 Posts: 94 Concentration: General Management, International Business GMAT 1: 710 Q49 V38 GPA: 4 Followers: 2 Kudos [?]: 4 [0], given: 51 Re: The fiscal year--- yet another new Praradox Q from gmatclub [#permalink] 10 Sep 2014, 12:24 daagh wrote: New project from GMAT Club! Click here The fiscal year (April to March) ended 2010-2011 was a bumper year for Sindian Bank as far as profits were concerned. On total revenue of income interest and non-income interest of$4B, the net profits stood at $1.3B. In contrast, the previous fiscal’s profits (2009 -2010 net profits were hardly$600M on revenues of $4.2B. Investors felt after the new fiscal’s financial results were declared that, that the bank was riding a high wave while the analysts were not enthused. They decried that the bonanza of 2010-2011 was a flash in the pan. Which of the following events, if true, can prove that the analysts were indeed right in their paradoxical findings? A. The RBI appointed a new chairman cum MD in April 2011 for the said Bank. B. During October 2010 to Feb 2014 the high-fly new banking chairman took on business exploration trips from Alaska to Antarctica, from Jamaica to Bangkok and from Alps to Andes, resulting in an expenditure of$300M and some old customers withdrawing their deposits.
C. In June 2009, The national Housing Bank, an overseer bank for institutions that offer housing finance, impounded $800M as doubtful assets on some difference of opinion about definition of doubtful assets, which was ordered to be released by the Supreme Court in December 2010. D. In order improve business; the New chairman sanctioned$2B worth loans to some film production units, whose films bombed at box-office.
E. The old chairman of the bank was elevated to the post of Deputy Governor of Reserve bank following his transfer from Sindian Bank

Firstly: I fail to understand why C is preferred over E.
C->>> We do not know what is the relation between national Housing Bank and Sindian Bank unless we assume that Sindian Bank was involved in housing finance.

Secondly: Is option D correct , grammar point of view? It reads "whose films bombed at box-office. " should it not be "whose films bombed were at box-office. " . The current phrasing confuses me with "whose films bombed the box-office." , which means the films were a success.

Please convey me your thoughts on these, especially on the second issue.
Director
Joined: 17 Jul 2014
Posts: 602
Location: United States
GMAT 1: 550 Q39 V28
GMAT 2: 560 Q42 V26
GMAT 3: 560 Q43 V24
GPA: 3.56
Followers: 3

Kudos [?]: 61 [0], given: 61

Re: The fiscal year--- yet another new Praradox Q from gmatclub [#permalink]  20 Nov 2015, 16:50
ok, so we have 2010-2011 with Rev 4B and NP 1.3B
2009-2010 - R=4B and NP=600MLN

analysts say - meh

why so?

it must have been something that happened during that period
maybe the 09-10 net profit was affected by an event that had to lower the net profit in 09-10, and after solved, resulted in an inflated 2010-2011 net profit. If this is the case, the net profit in 2010-2011 might have been way below the net profit in 09-10, and thus, the analysts opinion that the results are not that good as it might seem is explained.

A. The RBI appointed a new chairman cum MD in April 2011 for the said Bank.
even if it was appointed, how does this action explain the disappointment of the analysts? Out.

B. During October 2010 to Feb 2014 the high-fly new banking chairman took on business exploration trips from Alaska to Antarctica, from Jamaica to Bangkok and from Alps to Andes, resulting in an expenditure of $300M and some old customers withdrawing their deposits. the time-frame 2010-2014 - well..it might have happened in 2013 - thus the expenditures of 300M happened after the period we discuss. Out C. In June 2009, The national Housing Bank, an overseer bank for institutions that offer housing finance, impounded$800M as doubtful assets on some difference of opinion about definition of doubtful assets, which was ordered to be released by the Supreme Court in December 2010.
Aha! so in 09-10 - the net profit was decreased by 800MLN, and thus the total net profit in 09-10 would have been 1.4B, instead, it got only 600MLN.
since these 800 MLN were added to the 2010-2011 - the real net profit of 2010-2011 would have been 500 MLN. That's even worse than 09-10 with the 800 MLN impounded. This does explain why the analysts are reluctant to say that 2010-2011 was a good year.

D. In order improve business; the New chairman sanctioned \$2B worth loans to some film production units, whose films bombed at box-office.
irrelevant. It does not explain the discrepancies.

E. The old chairman of the bank was elevated to the post of Deputy Governor of Reserve bank following his transfer from Sindian Bank
so what? it does not explain why the analysts are disappointed with the results.

C is thus the best.
Re: The fiscal year--- yet another new Praradox Q from gmatclub   [#permalink] 20 Nov 2015, 16:50
Similar topics Replies Last post
Similar
Topics:
3 Each year Americans buy a record number of new books from 2 16 Oct 2014, 07:03
2 A certain South East Asian -- another Paradox new Q 0 14 Nov 2013, 04:33
5 ALF Corporation, --yet another Paradox question 4 13 Nov 2013, 08:41
36 Weakening Questions compiled from GMATClub(Updtd with links) 31 15 Sep 2010, 23:25
Planetary bodies differ from one another in their 6 15 Jul 2007, 00:14
Display posts from previous: Sort by