Directions : Following question consists of a statement followed by three arguments I, II and III . You have to decide which of the arguments is a STRONG arguments and which is a WEAK Argument. Statement : Should there be only few banks in place of numerous smaller banks in India? Arguments : I. Yes. This will help secure the investor’s money as these big banks will be able to withstand intermittent market related shocks. II. No. A large number of people will lose their jobs as after the merger many employees will be redundant. III. Yes. This will help consolidate the entire banking industry and will lead to healthy competition.

The correct answer is: Only I and III are strong.

Argument I is strong because it is based on the evidence that big banks are more likely to be able to withstand market shocks than small banks. This is because big banks have more resources and can spread their risk over a wider range of assets.

Argument II is weak because it is based on the assumption that a merger of banks will lead to job losses. However, this is not necessarily the case. In fact, a merger could lead to job creation if the new bank is more efficient than the old ones.

Argument III is strong because it is based on the evidence that consolidation in the banking industry can lead to healthy competition. This is because when there are fewer banks, each bank has more incentive to compete for customers and offer better services.

Here are some additional details about each argument:

• Argument I is based on the evidence that big banks are more likely to be able to withstand market shocks than small banks. This is because big banks have more resources and can spread their risk over a wider range of assets. For example, if one of a big bank’s loans goes bad, the bank can still make money from its other loans. However, if one of a small bank’s loans goes bad, the bank may not be able to make enough money from its other loans to stay afloat.
• Argument II is weak because it is based on the assumption that a merger of banks will lead to job losses. However, this is not necessarily the case. In fact, a merger could lead to job creation if the new bank is more efficient than the old ones. For example, if two banks merge, they may be able to eliminate duplicate jobs and save money. This money could then be used to hire new employees.
• Argument III is strong because it is based on the evidence that consolidation in the banking industry can lead to healthy competition. This is because when there are fewer banks, each bank has more incentive to compete for customers and offer better services. For example, if there are only two banks in a town, each bank will have to offer competitive rates and services in order to attract customers. However, if there are many banks in a town, each bank may not have to offer such competitive rates and services.