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The First Banking Group’s decision to invest in an

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The First Banking Group’s decision to invest in an

by BTGmoderatorDC » Thu May 31, 2018 5:33 pm

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The First Banking Group's decision to invest in an electronic network for transferring funds was based on a cost advantage over a nonelectronic system of about ten dollars per transaction in using an electronic system. Executives reasoned further that the system would give them an advantage over competitors.

Which of the following, if it is a realistic possibility, most seriously weakens the executives' projection of an advantage over competitors?

(A) The cost advantage of using the electronic system will not increase sufficiently to match the pace of inflation.
(B) Competitors will for the same reasons install electronic systems, and the resulting overcapacity will lead to mutually damaging price wars.
(C) The electronic system will provide a means for faster transfer of funds, if the First Banking Group wishes to provide faster transfer to its customers.
(D) Large banks from outside the area served by the First Banking Group have recently established branches in that area as competitors to the First Banking Group.
(E) Equipment used in the electronic network for transferring funds will be compatible with equipment used in other such networks.
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edited:

by deloitte247 » Wed Jun 13, 2018 10:09 am

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From the arrays of technical solutions provided we would try to wrap our heads around it so as to get the most genuine of the solutions.

From Option A - INCORRECT. There is no need for inflation to occur as a result of this initiative since it's not like the bank is trying to mop up currency in circulation. Furthermore, a bank alone does not determine the general rise in prices of goods and services. So, this option does not explain in actual fact how it would weaken the executives' projection.

In Option B - CORRECT. In all honesty, i'd have written this option myself if not that it's been written. Who says competitors won't do same? they have to, since it saves time, energy and drives business more quickly. There's no clear cut reason why this won't lead to price wars truly speaking. it has indeed weakened the writer's opinion.

In Option C - INCORRECT. This is very true, Electronic models of transactions would always lessen the burden on the customers and the banking operators. This statement is a positive one that contrasts with the position of the executives' desires.

In Option D - INCORRECT. This would still maintain the same lane of argument with that in Option B just that it lacks details to help our understanding from what the bank wishes to do and the attendant consequences.

In Option E - INCORRECT. Compatibility isn't a kind response to a question of how totally unreasonable the whole process would go either technical, logistics or otherwise. Still lacking in substance.
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