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To boost the sales of its insurance policies, the Geico insurance company has decided to run a promotion wherein the company will offer competitive pricing for car insurance if a new car owner signs a contract to stay with the same company for at least five years. Another condition of the offer will be that changing the insurance policy, which includes using the policy on a different vehicle, in the middle of the contract period will result in heavy fines that will be more than the money the customer would have saved by choosing this insurance in the first place.
Which of the following, if true, most strongly supports the prediction that this promotion will have its intended effect?
  • a)
    The insurance company is just a start up and many people do not know this firm.
  • b)
    Most people will use a car for at least five years before they sell the car and obtain another one.
  • c)
    The previous promotional campaign run by the company achieved the desired goal.
  • d)
    Geico is planning to spend a huge amount of money on this promotional campaign.
  • e)
    The market for car insurance has been at an all-time high during the past year.
Correct answer is option 'B'. Can you explain this answer?
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To boost the sales of its insurance policies, the Geico insurance comp...
To boost the sales of its insurance policies, the Geico insurance company has decided to run a promotion wherein the company will offer competitive pricing for car insurance if a new car owner signs a contract to stay with the same company for at least five years. Another condition of the offer will be that changing the insurance policy, which includes using the policy on a different vehicle, in the middle of the contract period will result in heavy fines that will be more than the money the customer would have saved by choosing this insurance in the first place.
Which of the following, if true, most strongly supports the prediction that this promotion will have its intended effect?
Argument Analysis
 
Pre-Thinking
Conclusion Clarification
There is no stated conclusion by the author. However, the question stem asks us to supports the prediction that this promotion will be successful in increasing the sales of insurance policies. Under the promotion the company will offer competitive pricing for car insurance if the owner signs a contract to stay with the same company for at least five years
Pre-Thinking Approach
Let’s see how we can support the promotion’s chances of becoming a success.  To do so, we will look at the logical structure, focusing on linkage 1. Thus the way to strengthen the prediction will be to support this linkage by showing that the promotion will be successful in achieving its aim.
Linkage#1
    • Instance 1 – New car owners are not likely to replace their cars for five years (lock-in period).
    • Instance 2  – Studies have shown that to recover the cost of buying a new car, most people tend to use it for at least 6 years before trading it for a new one.
In both the scenarios, new owners of cars would find the promotion attractive, thereby increasing the chances of increased sales for Geico.
With this pre-thinking in mind, let’s evaluate the answer choices.
Answer Choices
A
The insurance company is just a start up and many people do not know this firm.
Incorrect - Irrelevant
There is no stated or implied link between customers’ familiarity with a company and their likelihood to buy products from it.
B
Most people will use a car for at least five years before they sell the car and obtain another one.
Correct
This choice is written along the lines of our pre-thinking instance #1.
C
The previous promotional campaign run by the company achieved the desired goal.
Incorrect - Irrelevant
The success of the company’s previous promotional campaign(s) doesn’t support that this promotional campaign will be successful too.
D
Geico is planning to spend a huge amount of money on this promotional campaign.
Incorrect - Irrelevant
Neither the passage nor the choice makes any connection between the amount of money spent on a campaign and its chances of achieving success.
E
The market for car insurance has been at an all-time high during the past year.
Incorrect - Irrelevant
Even if in the past the market has been conducive for the car insurance companies, it doesn’t increase our faith in this promotion that has some specific conditions attached to it.
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Most Upvoted Answer
To boost the sales of its insurance policies, the Geico insurance comp...
Strongest Supporting Factor for Geico's Promotion

Background: Geico insurance company is offering competitive pricing for car insurance if a new car owner signs a contract to stay with the same company for at least five years. Changing the insurance policy in the middle of the contract period will result in heavy fines.

Predicted Effect: The promotion will boost the sales of Geico's insurance policies.

Strongest Supporting Factor: Most people will use a car for at least five years before they sell the car and obtain another one.

Explanation:

Option B is the strongest supporting factor because it directly supports the condition mentioned in the promotion that the customer has to stay with the same company for at least five years. If most people use a car for at least five years before selling it, it means that they will need car insurance for the same period which aligns with the promotion's condition. Therefore, this factor suggests that the promotion will have its intended effect of boosting Geico's insurance policy sales.

The other options do not provide a strong supporting factor for the promotion's success. Option A is irrelevant because the popularity of the insurance company has no bearing on the promotion's impact. Option C might suggest that the previous promotion achieved its goal, but it doesn't provide any information about the current promotion's success. Option D might indicate that Geico is investing heavily in the promotion, but that doesn't necessarily mean that it will be successful. Option E might suggest that the market for car insurance is doing well, but it doesn't provide any information about the promotion's effectiveness.
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To boost the sales of its insurance policies, the Geico insurance company has decided to run a promotion wherein the company will offer competitive pricing for car insurance if a new car owner signs a contract to stay with the same company for at least five years. Another condition of the offer will be that changing the insurance policy, which includes using the policy on a different vehicle, in the middle of the contract period will result in heavy fines that will be more than the money the customer would have saved by choosing this insurance in the first place.Which of the following, if true, most strongly supports the prediction that this promotion will have its intended effect?a)The insurance company is just a start up and many people do not know this firm.b)Most people will use a car for at least five years before they sell the car and obtain another one.c)The previous promotional campaign run by the company achieved the desired goal.d)Geico is planning to spend a huge amount of money on this promotional campaign.e)The market for car insurance has been at an all-time high during the past year.Correct answer is option 'B'. Can you explain this answer?
Question Description
To boost the sales of its insurance policies, the Geico insurance company has decided to run a promotion wherein the company will offer competitive pricing for car insurance if a new car owner signs a contract to stay with the same company for at least five years. Another condition of the offer will be that changing the insurance policy, which includes using the policy on a different vehicle, in the middle of the contract period will result in heavy fines that will be more than the money the customer would have saved by choosing this insurance in the first place.Which of the following, if true, most strongly supports the prediction that this promotion will have its intended effect?a)The insurance company is just a start up and many people do not know this firm.b)Most people will use a car for at least five years before they sell the car and obtain another one.c)The previous promotional campaign run by the company achieved the desired goal.d)Geico is planning to spend a huge amount of money on this promotional campaign.e)The market for car insurance has been at an all-time high during the past year.Correct answer is option 'B'. Can you explain this answer? for GMAT 2024 is part of GMAT preparation. The Question and answers have been prepared according to the GMAT exam syllabus. Information about To boost the sales of its insurance policies, the Geico insurance company has decided to run a promotion wherein the company will offer competitive pricing for car insurance if a new car owner signs a contract to stay with the same company for at least five years. Another condition of the offer will be that changing the insurance policy, which includes using the policy on a different vehicle, in the middle of the contract period will result in heavy fines that will be more than the money the customer would have saved by choosing this insurance in the first place.Which of the following, if true, most strongly supports the prediction that this promotion will have its intended effect?a)The insurance company is just a start up and many people do not know this firm.b)Most people will use a car for at least five years before they sell the car and obtain another one.c)The previous promotional campaign run by the company achieved the desired goal.d)Geico is planning to spend a huge amount of money on this promotional campaign.e)The market for car insurance has been at an all-time high during the past year.Correct answer is option 'B'. Can you explain this answer? covers all topics & solutions for GMAT 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for To boost the sales of its insurance policies, the Geico insurance company has decided to run a promotion wherein the company will offer competitive pricing for car insurance if a new car owner signs a contract to stay with the same company for at least five years. Another condition of the offer will be that changing the insurance policy, which includes using the policy on a different vehicle, in the middle of the contract period will result in heavy fines that will be more than the money the customer would have saved by choosing this insurance in the first place.Which of the following, if true, most strongly supports the prediction that this promotion will have its intended effect?a)The insurance company is just a start up and many people do not know this firm.b)Most people will use a car for at least five years before they sell the car and obtain another one.c)The previous promotional campaign run by the company achieved the desired goal.d)Geico is planning to spend a huge amount of money on this promotional campaign.e)The market for car insurance has been at an all-time high during the past year.Correct answer is option 'B'. Can you explain this answer?.
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Another condition of the offer will be that changing the insurance policy, which includes using the policy on a different vehicle, in the middle of the contract period will result in heavy fines that will be more than the money the customer would have saved by choosing this insurance in the first place.Which of the following, if true, most strongly supports the prediction that this promotion will have its intended effect?a)The insurance company is just a start up and many people do not know this firm.b)Most people will use a car for at least five years before they sell the car and obtain another one.c)The previous promotional campaign run by the company achieved the desired goal.d)Geico is planning to spend a huge amount of money on this promotional campaign.e)The market for car insurance has been at an all-time high during the past year.Correct answer is option 'B'. 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Another condition of the offer will be that changing the insurance policy, which includes using the policy on a different vehicle, in the middle of the contract period will result in heavy fines that will be more than the money the customer would have saved by choosing this insurance in the first place.Which of the following, if true, most strongly supports the prediction that this promotion will have its intended effect?a)The insurance company is just a start up and many people do not know this firm.b)Most people will use a car for at least five years before they sell the car and obtain another one.c)The previous promotional campaign run by the company achieved the desired goal.d)Geico is planning to spend a huge amount of money on this promotional campaign.e)The market for car insurance has been at an all-time high during the past year.Correct answer is option 'B'. Can you explain this answer? theory, EduRev gives you an ample number of questions to practice To boost the sales of its insurance policies, the Geico insurance company has decided to run a promotion wherein the company will offer competitive pricing for car insurance if a new car owner signs a contract to stay with the same company for at least five years. Another condition of the offer will be that changing the insurance policy, which includes using the policy on a different vehicle, in the middle of the contract period will result in heavy fines that will be more than the money the customer would have saved by choosing this insurance in the first place.Which of the following, if true, most strongly supports the prediction that this promotion will have its intended effect?a)The insurance company is just a start up and many people do not know this firm.b)Most people will use a car for at least five years before they sell the car and obtain another one.c)The previous promotional campaign run by the company achieved the desired goal.d)Geico is planning to spend a huge amount of money on this promotional campaign.e)The market for car insurance has been at an all-time high during the past year.Correct answer is option 'B'. Can you explain this answer? tests, examples and also practice GMAT tests.
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