Question:
"Techcorporation is our top pick for investment this term. We urge all of our clients to invest in this new company. For the first time in ten years, a company that has developed satellite technology has been approved by the FTA to compete with the current satellite provider. That company is Techcorporation. A consumer survey last year indicated that over eighty percent of respondents were dissatisfied with the current satellite television provider and would want to switch to another provider if the industry were not a monopoly. Thus, the new venture of Techcorporation into satellite television will prove to be highly profitable for those who invest now."
Write a response in which you discuss what questions would need to be answered in order to decide whether the advice and the argument on which it is based are reasonable. Be sure to explain how the answers to these questions would help to evaluate the advice.
Answer:
The following argument is flawed for numerous reasons and several questions need to be answered in order to prove the argument reasonable. Primarily, the argument is based on the unwarranted assumption that Techcorporation is a better satellite provider than the current satellite provider rendering its main conclusion that investing in Techcorporation now will prove to be highly profitable for those who invest,invalid.
The argument fails to provide any justification about why Techcorporation was the top pick for investment. What was the basis of selection and what are the reasons for people to invest? The answer to this question will enable the investors to make sound decision and accordingly select the company for investment. Apart from being approved by FTA, the argument doesn't provide any reason for investing in Techcorporation. It may be possible that the current as well as the competing comapanies are approved by the FTA as well. In the absence of the answer to this question,it is difficult to follow the advice put forward by the argument and consider it as reasonable.
Further, the argument states that in the survey conducted, about eighty percent of the respondents were dissatisfied with the current satellite provider. What was the total number of people who were surveyed and where do these people live? What was the reason for dissatisfaction with the current provider? If a small number of people were surveyed and the place where the survey was conducted had a limited reach of the satellite provider,the survey would have been flawed and could not be relied upon for proving the argument reasonable. The argument fails to provide any information about the same and also, the reasons for dissatisfaction among the respondents towards the current satellite television provider are not specified in the argument. Whether the people were dissatisfied with the return of their investment or were dissatisfied with the services of the current provider is unknown.
Finally, it is stated in the argument that investing in Techcorporation will prove to be highly profitable. What if people are dissatisfied with Techcorporation as well? What is the guarantee and on what factors it is stated that the investment will be profitable? The argument doesn't mention the reasons and fails to provide any convincing evidence to the investors to invest in Techcorporation. It is possible that Techcorporation suffers the same fate as the current provider and instead proves to be unprofitable for the clients.
Because the argument makes many unwarranted assumptions and several questions need to be answered,it fails to make a convincing case that investing in Techcorporation will prove to be profitable and people will be satisfied with the services and the returns that the company will provide.
The following appeared in a newsletter offering advice to investors:
"Techcorporation is our top pick for investment this term. We urge all of our clients to invest in this new company. For the first time in ten years, a company that has developed satellite technology has been approved by the FTA to compete with the current satellite provider. That company is Techcorporation. A consumer survey last year indicated that over eighty percent of respondents were dissatisfied with the current satellite television provider and would want to switch to another provider if the industry were not a monopoly. Thus, the new venture of Techcorporation into satellite television will prove to be highly profitable for those who invest now."
Write a response in which you discuss what questions would need to be answered in order to decide whether the advice and the argument on which it is based are reasonable. Be sure to explain how the answers to these questions would help to evaluate the advice.
Answer:
The following argument is flawed for numerous reasons and several questions need to be answered in order to prove the argument reasonable. Primarily, the argument is based on the unwarranted assumption that Techcorporation is a better satellite provider than the current satellite provider rendering its main conclusion that investing in Techcorporation now will prove to be highly profitable for those who invest,invalid.
The argument fails to provide any justification about why Techcorporation was the top pick for investment. What was the basis of selection and what are the reasons for people to invest? The answer to this question will enable the investors to make sound decision and accordingly select the company for investment. Apart from being approved by FTA, the argument doesn't provide any reason for investing in Techcorporation. It may be possible that the current as well as the competing comapanies are approved by the FTA as well. In the absence of the answer to this question,it is difficult to follow the advice put forward by the argument and consider it as reasonable.
Further, the argument states that in the survey conducted, about eighty percent of the respondents were dissatisfied with the current satellite provider. What was the total number of people who were surveyed and where do these people live? What was the reason for dissatisfaction with the current provider? If a small number of people were surveyed and the place where the survey was conducted had a limited reach of the satellite provider,the survey would have been flawed and could not be relied upon for proving the argument reasonable. The argument fails to provide any information about the same and also, the reasons for dissatisfaction among the respondents towards the current satellite television provider are not specified in the argument. Whether the people were dissatisfied with the return of their investment or were dissatisfied with the services of the current provider is unknown.
Finally, it is stated in the argument that investing in Techcorporation will prove to be highly profitable. What if people are dissatisfied with Techcorporation as well? What is the guarantee and on what factors it is stated that the investment will be profitable? The argument doesn't mention the reasons and fails to provide any convincing evidence to the investors to invest in Techcorporation. It is possible that Techcorporation suffers the same fate as the current provider and instead proves to be unprofitable for the clients.
Because the argument makes many unwarranted assumptions and several questions need to be answered,it fails to make a convincing case that investing in Techcorporation will prove to be profitable and people will be satisfied with the services and the returns that the company will provide.