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.
What is/are the author’s viewpoint(s) in accordance with Paragraph 5?
(I) The author is skeptical about the credibility of the research works on the measurement of cost of noise.
(II) The author is critical about the consequences of the problem of noise as it leads organizations to lose substantial amounts of money that often go unrealized.
(III) The author feels that the problem of noise is severe enough to require action.

Question

Accepted Answer

**Solution:**

1. Statement (I) says the author is skeptical about the credibility of research on noise cost measurement. However, Paragraph 5 clearly shows the author accepts the research findings and uses them to highlight the financial impact of noise. There is no indication of skepticism.

2. Statement (II) is supported by the passage where the author points out that noise causes companies to lose large sums of money unknowingly, which is a critical consequence.

3. Statement (III) is also supported because the author emphasizes the severity of noise and the potential value in reducing it, implying the need for action.

4. Therefore, only statements (II) and (III) reflect the author's viewpoint accurately.

**Answer:** (d) Both (II) and (III)

Answer

Answer

Answer

Answer