GRE Argument Task Essay

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Hello all,

Here is one of the timed argument responses that I wrote for one of my GRE practice tests. And critiques/score estimates would be well appreciated!

 

The following appeared in a letter from a firm providing investment advice to a client.

"Homes in the northeastern United States, where winters are typically cold, have traditionally used oil as their major fuel for heating. Last year that region experienced twenty days with below-average temperatures, and local weather forecasters throughout the region predict that this weather pattern will continue for several more years. Furthermore, many new homes have been built in this region during the past year. Based on these developments, we predict a large increase in the demand for heating oil. Therefore, we 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 discuss what questions would need to be answered in order to decide whether the recommendation 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 recommendation.

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     In order to properly consider investing into Consolidated Industries, the client must consider various questions that were not posed by the investing firm. Crucial questions revolving around the housing market, regional demographics, and seasonality were not directly answered by the firm.

     The investing firm states that northeastern winters are cold and that the twenty-day weather pattern will continue on into the future. On the other hand, the firm does not state which season the weather pattern occurred in. For example, if the weather pattern occurred in summer, the cooler temperatures may have been a respite from the sweltering summers of the northeast; however, this temperature drop is not likely enough to warrant using oil-based heaters. The likelihood of using oil-based heaters would increase if the temperature drop was observed in the autumn or the winter, when normal temperatures are much cooler.

     The details of the northeastern housing market are also not revealed to the client; the firm only states that the previous year observed the development of new homes within the region. The firm does not state, however, whether or not these new homes have been purchased or if the homes are still up for sale. If the new homes are yet to be purchased, investing in Consolidated Industries would be a high risk move for the investor. Furthermore, the firm fails to state if these new homes even possess oil-bases heating appliances. Due to the fact that traditional northeastern heating appliances are oil-based, it is not likely that a modern home contains traditional and even out dated heating appliances. These aforementioned details must be clarified to the potential investor so that they can fully evaluation the potential risk of the investment.

     Lastly, the investing firm does not state the percentage of those that actually use oil-based heating in the winter. Oil-based heating appliances may be the most common, but this does not mean that they are commonly used during the winter. Modern belief systems that revolve around green energy and saving as much money as possible may influence many home owners to not use heating appliances during the winter. The possibility of this statement may dramatically reduce the revenue of Consolidated Industries.

 Consolidated Industries must clarify the aforementioned details to the client, otherwise their potential investor may not have enough information to make a decision. The client may also recognize gaps within the firm’s recommendation and, therefore, not acknowledge the firm to have a convincing argument. Once questions revolving around the northeastern seasonal temperatures, the success of the housing market, and details about oil-based heating usage are answered, then the client may be able to make a well-informed decision about investing into Consolidated Industries.