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16 Mar 2018, 11:26
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Over the last five , Bank X has experienced the number of its retail customer accounts dropped by over 50%.Over this same period,share price of The Bank has increased by more than 80%.The phenomenon has confused certain investor, who believe that a bank's share price should drop if its number of customer accounts drops.
Which of the following, if true over the last five years,best accounts for the observed movement in the price of share of banks X?
A) two years ago Bank X was investigated by the Securities and Exchange Commission for accounting irregularities,but last year the company was cleared off all charges .
B) Bank X recently implemented a highly publicized program for no-fee home mortgages.
C) Bank X is in the process of switching its customer base from retail customer to commercial customers, which now account for over 75% of the bank's revenues.
D) there have been many aggressive new entrants into the retail customer banking business over the last five years.
Which of the following, if true over the last five years,best accounts for the observed movement in the price of share of banks X?
A) two years ago Bank X was investigated by the Securities and Exchange Commission for accounting irregularities,but last year the company was cleared off all charges .
B) Bank X recently implemented a highly publicized program for no-fee home mortgages.
C) Bank X is in the process of switching its customer base from retail customer to commercial customers, which now account for over 75% of the bank's revenues.
D) there have been many aggressive new entrants into the retail customer banking business over the last five years.
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16 Mar 2018, 12:55
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painhunter
painhunter, is this question from the GMATPrep software? This post only has four answer choices. Please make sure that you type the question EXACTLY as it appears in the software.
17 Mar 2018, 22:27
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Over the last five , Bank X has experienced the number of its retail customer accounts dropped by over 50%.Over this same period,share price of The Bank has increased by more than 80%.The phenomenon has confused certain investor, who believe that a bank's share price should drop if its number of customer accounts drops.
Which of the following, if true over the last five years,best accounts for the observed movement in the price of share of banks X?
A) two years ago Bank X was investigated by the Securities and Exchange Commission for accounting irregularities,but last year the company was cleared off all charges- this options accounts only for last 2 years.
B) Bank X recently implemented a highly publicized program for no-fee home mortgages.- recent is the clue. what about last 5 years?
C) Bank X is in the process of switching its customer base from retail customer to commercial customers, which now account for over 75% of the bank's revenues- Correct. this explains why there is decrease in retail customer base, and also that the increase in share price could be because of increase in revenues from commercial customers.
D) there have been many aggressive new entrants into the retail customer banking business over the last five years.- this should actually decrease share price.
there is no option E to evaluate.
out of these 4, IMO C.
Correct me please if my logic is wrong.
Which of the following, if true over the last five years,best accounts for the observed movement in the price of share of banks X?
A) two years ago Bank X was investigated by the Securities and Exchange Commission for accounting irregularities,but last year the company was cleared off all charges- this options accounts only for last 2 years.
B) Bank X recently implemented a highly publicized program for no-fee home mortgages.- recent is the clue. what about last 5 years?
C) Bank X is in the process of switching its customer base from retail customer to commercial customers, which now account for over 75% of the bank's revenues- Correct. this explains why there is decrease in retail customer base, and also that the increase in share price could be because of increase in revenues from commercial customers.
D) there have been many aggressive new entrants into the retail customer banking business over the last five years.- this should actually decrease share price.
there is no option E to evaluate.
out of these 4, IMO C.
Correct me please if my logic is wrong.
Archived Topic
Hi there,
This topic has been closed and archived due to inactivity or violation of community quality standards. No more replies are possible here.
Where to now? Join ongoing discussions on thousands of quality questions in our Critical Reasoning (CR) Forum
Still interested in this question? Check out the "Best Topics" block above for a better discussion on this exact question, as well as several more related questions.
Thank you for understanding, and happy exploring!
