We are sharing some memory based questions SBI PO Mains 2017 in English Section.
Two Reading Comprehensions containing 5 questions each were asked in SBI PO Mains 2017 Exam. There were no Synonyms/Antonyms this time. The RCs were divided in paragraphs and questions were set asking answers from particular paragraphs.
Paragraph 1: At a global financial services firm we worked with, a longtime customer accidentally submitted the same application file to two offices. Though the employees who reviewed the file were supposed to follow the same guidelines—and thus arrive at similar outcomes—the separate offices returned very different quotes. Taken aback, the customer gave the business to a competitor. From the point of view of the firm, employees in the same role should have been interchangeable, but in this case they were not. Unfortunately, this is a common problem.
Paragraph 2: Professionals in many organizations are assigned arbitrarily to cases: appraisers in credit-rating agencies, physicians in emergency rooms, underwriters of loans and insurance, and others. Organizations expect consistency from these professionals: Identical cases should be treated similarly, if not identically. The problem is that humans are unreliable decision makers; their judgments are strongly influenced by irrelevant factors, such as their current mood, the time since their last meal, and the weather. We call the chance variability of judgments noise. It is an invisible tax on the bottom line of many companies.
Paragraph 3: Some jobs are noise-free. Clerks at a bank or a post office perform complex tasks, but they must follow strict rules that limit subjective judgment and guarantee, by design, that identical cases will be treated identically. In contrast, medical professionals, loan officers, project managers, judges, and executives all make judgment calls, which are guided by informal experience and general principles rather than by rigid rules. And if they don’t reach precisely the same answer that every other person in their role would, that’s acceptable; this is what we mean when we say that a decision is “a matter of judgment.” A firm whose employees exercise judgment does not expect decisions to be entirely free of noise. But often noise is far above the level that executives would consider tolerable—and they are completely unaware of it.
Paragraph 4: The prevalence of noise has been demonstrated in several studies. Academic researchers have repeatedly confirmed that professionals often contradict their own prior judgments when given the same data on different occasions. For instance, when software developers were asked on two separate days to estimate the completion time for a given task, the hours they projected differed by 71%, on average. When pathologists made two assessments of the severity of biopsy results, the correlation between their ratings was only .61 (out of a perfect 1.0), indicating that they made inconsistent diagnoses quite frequently. Judgments made by different people are even more likely to diverge. Research has confirmed that in many tasks, experts’ decisions are highly variable: valuing stocks, appraising real estate, sentencing criminals, evaluating job performance, auditing financial statements, and more. The unavoidable conclusion is that professionals often make decisions that deviate significantly from those of their peers, from their own prior decisions, and from rules that they themselves claim to follow.
Paragraph 5: Noise is often insidious: It causes even successful companies to lose substantial amounts of money without realizing it. How substantial? To get an estimate, we asked executives in one of the organizations we studied the following: “Suppose the optimal assessment of a case is $100,000. What would be the cost to the organization if the professional in charge of the case assessed a value of $115,000? What would be the cost of assessing it at $85,000?” The cost estimates were high. Aggregated over the assessments made every year, the cost of noise was measured in billions—an unacceptable number even for a large global firm. The value of reducing noise even by a few percentage points would be in the tens of millions. Remarkably, the organization had completely ignored the question of consistency until then.
3 of the 5 Questions:
- Author’s viewpoint as indicated in paragraph 5
- Opposite of phrase ‘Unfortunately, this is a common problem.’
- Which of the following can follow paragraph 4 so as to connect it to paragraph 5?
Paragraph 1: Deutsche is more leveraged than its peers; it is unusual in lacking a crown jewel around which it can base a business model; and it has a stack of derivatives whose prices are hard to observe in the market. More positively, it is light on the non-performing loans that clog the balance-sheets of banks in places like Italy. But in other ways its problems have a very familiar ring. Deutsche is struggling to make a decent return. It has taken too long to face up to its problems. And the market it operates in is overbanked. Years after American banks were forced to clean themselves up, too many European lenders are still flailing as a result
Paragraph 2: Europeans prefer to blame others for the turmoil. Deutsche has lashed out at “forces in the market” for its most recent bout of trouble. But its shares had already fallen by 42% this year before news broke last month of a proposed Department of Justice (DoJ) fine of $14 billion for mortgage-related misdeeds. German politicians insinuate that the mooted fine represents revenge for Europe’s recent tax case against Apple, an American champion. Yet the DoJ has slapped large fines on American banks, too. Deutsche’s vulnerability to shocks is the problem, not the shocks themselves.
Paragraph 3: Fingers also point at global regulators. The boss of Credit Suisse, Tidjane Thiam, says his sector is “not really investible”. It is true that the rules have got much stricter in the past few years, particularly for institutions, like Deutsche, that have big investment-banking arms. It is also true that ultra-loose monetary policy, and in particular the negative interest rates that now prevail in much of Europe, eat away at banks’ profitability. But some banks cope better than others in this painful environment. The IMF has compared returns on equity before and after the financial crisis. Those at large European banks fell by 11.4 percentage points, whereas those at American lenders dipped by only three points. Rather than blaming speculators, Americans and regulators, Europe’s bankers and policymakers need to put their own house in order.
Paragraph 4: Within institutions, that means cutting costs and raising capital. According to S&P Global Market Intelligence, the average cost-to-income ratio at an American bank in 2015 was 59%; Italy’s figure stood at 67% and Germany’s at 72%. Scandinavian banks already operate with much lower costs than their peers elsewhere in Europe. The axe is now swinging: Commerzbank, another struggling German lender, and ING, a Dutch bank, have announced thousands of job cuts in the past few days.
Paragraph 5: But more can be done. Pay is one obvious lever. Deutsche’s bankers trousered roughly the same amount in annual compensation between 2011 and 2015, even as the bank’s share price dived. And before shareholders complain too loudly about that, recall that in 2007-15 the dividend payments by 90 euro-zone banks amounted to €223 billion ($250 billion). Their retained earnings would have been 64% higher at the end of that period if they had not paid out dividends.
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