PT7.S4.Q6 - Something about bankers and loans

tahurrrrr

help

I got this Necessary Assumption question right, and while it wasn't completely a shot in the dark, I'm struggling to articulate what the argument is saying, and why C is the correct answer. So here I will try to type it out. Any feedback is appreciated.

Argument: The banks should not bear the cost of the insurance. It should be the depositors aka the people who benefit from the insurance.

The necessary assumption: Banks aren't already doing something that offsets the insurance costs they're responsible for

premxsptp

Hey tahur, I believe you got the reasoning right. For further clarification, the structure of the argument is:
i) Banks pay premiums for insurance on an individual's deposits.
ii) However, the individual is the beneficiary of this policy.
iii) Therefore, the individual should bear the cost for the insurance on their deposit.
ii) Therefore, the government should ensure that the individual bears the cost of insuring their deposit.

For the above arguement to follow, we would need to assume that the bank isn't already taking measures to collect the required premium amount from depositors. This would mean that the individual is indirectly bearing the cost of the insurance.

C simply gives us one manner in which the banks are already collecting premium amounts from depositors, and so it follows that it is an assumption.

(Perhaps another assumption that this argument could entail is that individuals must bear the costs for policies that benefit them , as the argument just presumes this to be axiomatic.)

tahurrrrr

@premxsptp thank you <33333 That was super helpful

premxsptp

@tahurrrrr you're welcome, glad to help