Thanks for reading and rating, BTG community. This is my first attempt at an AWA. I am scheduled for a July 24 test date. Please let me know if I'm on track.
Prompt:
The following appeared in a newspaper story giving advice about investments:
"As overall life expectancy continues to rise, the population of our country is growing increasingly older. For example, more than 20 percent of the residents of one of our more populated regions are now at least 65 years old, and occupancy rates at resort hotels in that region declined significantly during the past six months. Because of these two related trends, a prudent investor would be well advised to sell interest in hotels and invest in hospitals and nursing homes instead."
Response:
The author's advice to sell interest in hotels and invest in hospitals and nursing homes due to changing demographics is unsubstantiated by evidence and, therefore, flawed. As technology and health care continue to improve, life expectancy rates have continued to rise. This shift in demographics - a larger senior citizen population - can lead to significant economic implications. In this instance, however, the author tries to relate two seemingly unrelated events.
The author's advice to sell interest in hotels and instead invest in hospitals and nursing homes is based on an increasing life expectancy rate in a certain populous region and a recent trend of decreasing occupancy rates at resort hotels. These premises lack validity as it is unconfirmed if the timeline of the increasing life expectancy rate directly corresponds with the six month trend of decreasing occupancy rates. It is entirely possible that the decrease in occupancy rates is due to an economic reason, such as a recession, or a weather related reason, such a natural disaster that could have put resorts out of business.
Furthermore, the author makes a wildly ambitious assumption that the increasing life expectancy rate is directly related to the decreasing occupancy rate at resort hotels. This assumption is flawed as it suggests that one phenomena - increasing life expectancy - is the cause for another - decreasing occupancy. There is no evidence to suggest that one event caused the other. In addition, the author's assumption relies on six months of data without clearly identifying a long term trend.
The author could strengthen his investment advice if he or she were to provide additional data that provides evidence that the two events are related. In addition, information about other comparable regions experiencing similar events would significantly strengthen the author's claim. Without further evidence, it is impossible to justify that an increase in residents of at least 65 years old has led to a decrease in occupancy rates at resort hotels.
In sum, the author's investment advice is based on an assumption that lacks any evidence. The author does not provide any evidence as to how the two events are related or how one event led to another. The gap in evidence and the leap in assuming that correlation does indeed lead to causation renders the author's claim invalid. In fact, a prudent investor would be best served to ask for further justification before making a hasty investment decision.
Prompt:
The following appeared in a newspaper story giving advice about investments:
"As overall life expectancy continues to rise, the population of our country is growing increasingly older. For example, more than 20 percent of the residents of one of our more populated regions are now at least 65 years old, and occupancy rates at resort hotels in that region declined significantly during the past six months. Because of these two related trends, a prudent investor would be well advised to sell interest in hotels and invest in hospitals and nursing homes instead."
Response:
The author's advice to sell interest in hotels and invest in hospitals and nursing homes due to changing demographics is unsubstantiated by evidence and, therefore, flawed. As technology and health care continue to improve, life expectancy rates have continued to rise. This shift in demographics - a larger senior citizen population - can lead to significant economic implications. In this instance, however, the author tries to relate two seemingly unrelated events.
The author's advice to sell interest in hotels and instead invest in hospitals and nursing homes is based on an increasing life expectancy rate in a certain populous region and a recent trend of decreasing occupancy rates at resort hotels. These premises lack validity as it is unconfirmed if the timeline of the increasing life expectancy rate directly corresponds with the six month trend of decreasing occupancy rates. It is entirely possible that the decrease in occupancy rates is due to an economic reason, such as a recession, or a weather related reason, such a natural disaster that could have put resorts out of business.
Furthermore, the author makes a wildly ambitious assumption that the increasing life expectancy rate is directly related to the decreasing occupancy rate at resort hotels. This assumption is flawed as it suggests that one phenomena - increasing life expectancy - is the cause for another - decreasing occupancy. There is no evidence to suggest that one event caused the other. In addition, the author's assumption relies on six months of data without clearly identifying a long term trend.
The author could strengthen his investment advice if he or she were to provide additional data that provides evidence that the two events are related. In addition, information about other comparable regions experiencing similar events would significantly strengthen the author's claim. Without further evidence, it is impossible to justify that an increase in residents of at least 65 years old has led to a decrease in occupancy rates at resort hotels.
In sum, the author's investment advice is based on an assumption that lacks any evidence. The author does not provide any evidence as to how the two events are related or how one event led to another. The gap in evidence and the leap in assuming that correlation does indeed lead to causation renders the author's claim invalid. In fact, a prudent investor would be best served to ask for further justification before making a hasty investment decision.
