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20 Mar 2019, 08:19
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Difficulty:
25%
(medium)
Question Stats:
76% (01:33) correct
24%
(01:43)
wrong
based on 139
sessions
History
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Over the last five years, Eagle Trust Bank has seen the number of its retail customer accounts drop by over 40 percent. Over this same period, the price of Eagle Trust stock has increased by more than 80 percent. This phenomenon has perplexed certain investors, who believe that a bank’s stock 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 Eagle Trust stock?
A. Two years ago Eagle Trust was investigated by the Securities and Exchange Commission for accounting irregularities, but last year the company was cleared of all charges.
B. Eagle Trust recently implemented a highly publicized program for no-fee home mortgages.
C. Eagle Trust is in the process of switching its customer base from retail customers to commercial customers, which now account for over 75 percent of the bank’ revenues.
D. There have been many aggressive new mentrants into the retail customer banking business over the last five years.
E. Eagle Trust is known for offering one of the best employee benefits packages in the industry.
Source: McGraw-Hill's GMAT (5th)
Which of the following, if true over the last five years, best accounts for the observed movement in the price of Eagle Trust stock?
A. Two years ago Eagle Trust was investigated by the Securities and Exchange Commission for accounting irregularities, but last year the company was cleared of all charges.
B. Eagle Trust recently implemented a highly publicized program for no-fee home mortgages.
C. Eagle Trust is in the process of switching its customer base from retail customers to commercial customers, which now account for over 75 percent of the bank’ revenues.
D. There have been many aggressive new mentrants into the retail customer banking business over the last five years.
E. Eagle Trust is known for offering one of the best employee benefits packages in the industry.
Source: McGraw-Hill's GMAT (5th)
20 Mar 2019, 08:59
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IMO C Eagle Trust is in the process of switching its customer base from retail customers to commercial customers, which now account for over 75 percent of the bank’ revenues.
a reason why revenue have increase for the bank ; as bank has switched on to more profitable base of business
a reason why revenue have increase for the bank ; as bank has switched on to more profitable base of business
SajjadAhmad
20 Mar 2019, 10:12
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SajjadAhmad
Which of the following, if true over the last five years, best accounts for the observed movement in the price of Eagle Trust stock?
A. Two years ago Eagle Trust was investigated by the Securities and Exchange Commission for accounting irregularities, but last year the company was cleared of all charges.
Moral and emotional choices are considered wrong on GMAT most often.
B. Eagle Trust recently implemented a highly publicized program for no-fee home mortgages.
Do we know the success rate of this program? No. Hence not a good choice for us.
C. Eagle Trust is in the process of switching its customer base from retail customers to commercial customers, which now account for over 75 percent of the bank’ revenues.
The only choice that hits the core. Correct.
D. There have been many aggressive new entrants into the retail customer banking business over the last five years.
Irrelevant
E. Eagle Trust is known for offering one of the best employee benefits packages in the industry.
Good for the employees.
