Read the following passage divided into number of paragraphs carefully and answer the questions that follow it. 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.
Why according to the author is a decision considered as “a matter of judgment” as mentioned in Paragraph 3?
(I) In most cases, decisions are guided by informal experience and general principles rather than by rigid rules.
(II) In certain cases, medical professionals, judges, and executives have to take decisions which are beyond the strict rules that control instinctive judgment which might not be noise-free, yet acceptable to the system.
(III) Long experience on a job always increases people’s confidence in their judgments, but in the absence of rapid feedback, confidence is no guarantee of either accuracy or consensus.

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**Solution:**

1. According to Paragraph 3, decisions are considered "a matter of judgment" because they are often based on informal experience and general principles rather than strict rules. This supports statement (I).

2. The paragraph also states that professionals like medical experts, judges, and executives make decisions beyond rigid rules, and some variability (noise) in their judgments is acceptable. This validates statement (II).

3. Statement (III), although true in general, is not mentioned or supported in Paragraph 3. The paragraph does not discuss the effect of experience or confidence on accuracy or consensus.

4. Therefore, only statements (I) and (II) are correct as per the passage.

**Answer:** (d) Both (I) and (II) are correct

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