60. The following appeared in a letter from a firm providing investment advice for a client.
Most homes in the northeastern United States, where winters are typically cold, have traditionally used oil as their major fuel for heating. Last heating season that region experienced 90 days with below- normal temperatures, and climate forecasters predict that this weather pattern will continue for several more years. Furthermore, many new homes are being built in the region in response to recent population growth. Because of these trends, we predict an increased demand for heating oil and recommend investment in Consolidated Industries, one of whose major business operations is the retail sale of home heating oil.
Write a response in which you examine the stated and/or unstated assumptions of the argument. Be sure to explain how the argument depends on these assumptions and what the implications are for the argument if the assumptions prove unwarranted.
The investment advisor gave an advice to client that investing in oil retail business would be a good investment because the northeastern territories in the U.S. are usually very cold in winter. The following letter looks like quite possible logic for a client who does not know much about investment. However, there are several flaws in the argument. His/her assumptions are on the following: Weather patterns and forecasts is precise, Oil will be the major fuel for heating in a long-run, new houses built in area does not have any technology using less oil, and heating oil retailing would make profits since demand is high.
The investment advisor made a comment that weather in northeastern territories will be very cold over the years based on last season and forecasts. However, we cannot make major decisions only based on weather forecasts since the forecasts often make wrong prediction, and the weather changes is more unpredictable than ever.
In addition, the advisor believes that there will be high demanding in heating oil because it has been and there are more new homes being built in the region. Under this assumption, it tells us the advisor does not consider any alternative technologies and fuel sources. Though it is true that over decades oil was the major source of heating, there has been tremendous research and development for alternative energy and heating technology. In this regard, he/she cannot be certain about heating oil will be the major fuel in the future. Moreover, new home owners and construction contractors will consider the weather condition and try to find a way to be energy-efficient.
The investment advisor at the end advised to invest in heating oil retail sales business. This advice merely considers the demanding side of heating oil. These days, the price of natural resources including oil and gas are very fluctuating. Also, uncertainty of gas price does affect heating oil business, so that the advisor should remind this unwarranted profit and loss to clients when he/she suggested this matter.
It could be very attractive investment opportunity for people who do not know much about investment. However, I am afraid the letter from investment advisor makes so many uncertain assumptions that the advice cannot easily persuade clients. Since investment involves money and time, people should be careful while they analyze markets and business opportunities.
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- 60 The following appeared in a letter from a firm providing investment advice for a client Most homes in the northeastern United States where winters are typically cold have traditionally used oil as their major fuel for heating Last heating season that r 91
Sentence: His/her assumptions are on the following: Weather patterns and forecasts is precise, Oil will be the major fuel for heating in a long-run, new houses built in area does not have any technology using less oil, and heating oil retailing would make profits since demand is high.
Description: The fragment patterns and forecasts is not usually followed by is
Suggestion: Possible agreement error: Replace is with are
Sentence: However, we cannot make major decisions only based on weather forecasts since the forecasts often make wrong prediction, and the weather changes is more unpredictable than ever.
Description: The fragment the weather changes is not usually followed by is
Suggestion: Possible agreement error: Replace is with are
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Number of Paragraphs: 5 5