A mutual fund having billions of dollars in assets will typically inve

A mutual fund having billions of dollars in assets will typically invest that money in hundreds of companies, rarely holding more than one percent of the shares of any particular corporation.

(A) companies, rarely holding more than one percent
(B) companies, and it is rare to hold at least one percent or more
(C) companies and rarely do they hold more than one percent
(D) companies, so that they rarely hold more than one percent
(E) companies; rarely do they hold one percent or more

Rarely holding correctly modifies mutual funds - Hence A is correct

Hi egmat and ChrisLele
I have two doubts regarding the question
B) Isn't "It" in option B a placeholder pronoun referring to "to hold..". I am unable to understand why we are eliminating it because of ambiguity.
A)Isn't option (A) a run-on sentence as two independent clauses are separated by a comma. If not then what is the function on comma here?

B) You are right in that "it" is placeholder for "to hold". However the ambiguity is not in reference of the pronoun "it", but in that it is not clear who rarely holds the shares - the relation between the second clause ( after "and") and the first is not understood from this construction.

A) No run-on here - the part after comma is NOT an independent clause, but a present participle modifier - comma + present participle modifier is often used as an adverbial modifier to refer to the verb of the preceding modifier ( in words of some GMAT guides: used to refer to the entire preceding clause).

Hello anandch1994,


Thank you for the query.

Although both your doubts have already been addressed, I have a very different take on the usage of the pronoun it in Choice B.


IMHO, the pronoun it is not a placeholder in Choice B. It is a pronoun that refers to the noun A mutual fund because the context of the sentence clearly states that a mutual fund rarely holds more than one percent of the shares of any particular corporation.

Choice B is incorrect because

i. The cause-and-effect relationship suggested in the original sentence is lost.
ii. The original sentence says that the said mutual fund rarely holds more than one percent of share. It means that the if said mutual fund hold the shares, it just holds one percent of share. However, Choice B says that it is rare to hold at least one percent or more. The structure suggests that the said mutual fund does not even hold one percent or more.

Also, please bear in mind that a placeholder pronoun does NOT refer to anything at all.


Hope this helps.
Thanks.
Shraddha

The problem with B is that it implies that the fund may not hold even one percent. When so, logically it fails to answer how it can hold more than one percent. A, on the contrary makes it clear that the cap is one percent and no single investment may be even one plus a decimal. That is the actual impact of the altered intent of the phrase ' at least"

A mutual fund having billions of dollars in assets will typically invest that money in hundreds of companies, rarely holding more than one percent of the shares of any particular corporation.

(A) companies, rarely holding more than one percent
(B) companies, and it is rare to hold at least one percent or more
(C) companies and rarely do they hold more than one percent
(D) companies, so that they rarely hold more than one percent
(E) companies; rarely do they hold one percent or more

INTENDED MEANING : -->
A mutual fund that has billions of dollars in assets will invest that money in hundreds of companies. Then, the sentence expresses the result of this clause using a verb-ing modifier.

Option Analysis
(A) Correct.

(B) Incorrect. For the following reasons:
-- Using ‘at least’ and ‘or more’ together is redundant;
-- This option presents the two ideas using ‘and’, thus distorting the meaning by eliminating the cause and effect relationship of the original sentence.

(C) Incorrect. For the following reasons:
--The part after ‘and’ is an independent clause and thus needs to be connected using ‘comma+and’ with the previous independent clause.
--Logically, we know that ‘they’ should refer to ‘mutual fund’. However, grammatically it cannot since ‘they’ is plural and ‘mutual fund’ is singular. So, we have a pronoun error.

(D) Incorrect. For the same pronoun error as in option C.
Here, the USAGE of "so that" is correct. It is used as "WITH THE RESULT THAT".

(E) Incorrect. For the same pronoun error as in option C
-- This option presents the two ideas using ‘;’, thus distorting the meaning by eliminating the cause and effect relationship of the original sentence.

A mutual fund having billions of dollars in assets will typically invest that money in hundreds of companies, rarely holding more than one percent of the shares of any particular corporation.

I saw few posts that said, "rarely holding" modifies mutual fund and not companies.

But to me it was a verb-ing after a comma modifying the previous clause - "a mutual fund having billions of dollars".
Can it jump over other Nouns in this sentence to modify the "a mutual fund" ?

Need help here.

look at choice B.
in the pattern " it is rare that+clause", "it" is fake subject. "it" can not be a real subject
it is rare that I get 750 on gmat next time
if i write
I am rare that I get 750 on gmat next time
this is wrong sentence, which is similar to choice B.

..., Rarely holding..." part incorrectly modifies the company. Am I wrong ?

Hello Everyone!

Let's take a closer look at this question, so we can narrow down the options to the correct one! First, here is the original question with the major differences between the options highlighted in orange:

A mutual fund having billions of dollars in assets will typically invest that money in hundreds of companies, rarely holding more than one percent of the shares of any particular corporation.

(A) companies, rarely holding more than one percent
(B) companies, and it is rare to hold at least one percent or more
(C) companies and rarely do they hold more than one percent
(D) companies, so that they rarely hold more than one percent
(E) companies; rarely do they hold one percent or more

After a quick glance over the options, there are a couple major differences we can address:

1. "it" vs. "they" (pronoun-antecedent agreement)
2. -ing modifier in option A (modifier use)

Let's start with #1 on our list: "it" vs. "they." Since option A doesn't use a pronoun, we'll save that option for later review. However, let's make sure that the pronouns in options B, C, D, & E all match up in number to what they're referring to:

(A) companies, rarely holding more than one percent --> OK
(no pronoun = save for later)

(B) companies, and it is rare to hold at least one percent or more --> WRONG
(The pronoun "it" in this sentence is what we call a "dummy pronoun." It's not referring to anything earlier in the sentence, which is a big no-no on the GMAT. Dummy pronouns are confusing and unclear to readers, which is why the GMAT prefers you avoid them whenever possible.)

(C) companies and rarely do they hold more than one percent --> WRONG
(The plural "they" is referring back to the singular subject "a mutual fund," which is not parallel in number.)

(D) companies, so that they rarely hold more than one percent --> WRONG
(The plural "they" is referring back to the singular subject "a mutual fund," which is not parallel in number.)

(E) companies; rarely do they hold one percent or more --> WRONG
(The plural "they" is referring back to the singular subject "a mutual fund," which is not parallel in number.)

While we have effectively eliminated all the options except for A, we should still make sure that the -ing modifier is used correctly. To make this clearer to see, we've added in the non-underlined portions of the sentence:

(A) A mutual fund having billions of dollars in assets will typically invest that money in hundreds of companies, rarely holding more than one percent of the shares of any particular corporation.

To do a quick check, let's answer a couple key questions:

1. Is the -ing modifier referring back to the entire main clause (the subject and verb)? Yes!
2. Does the modifier actually add more useful information to the clause? Yes!

There you have it - option A is the correct choice! It's the only one that doesn't have any problems with pronoun-antecedent agreement, doesn't include any vague or misleading pronouns, and uses the -ing modifier correctly.


Don't study for the GMAT. Train for it.

Hi egmat



I have a question?

I can see the " comma + verb-ing", modifier in the option but does having an adverb "rarely" in between "comma" and the "verb-ing" make any difference? In other words is this structure okay?

Any help would be appreciated!
Thank you

A mutual fund having billions of dollars in assets will typically invest that money in hundreds of companies, rarely holding more than one percent of the shares of any particular corporation.... does this not imply that the companies where MF invest do not hold more than 1 percent shares making it illogical. Also, why use of and was not appreciated, it does talk about MF practices of investing

If that was the intended meaning, it would be more clear to have something like, "A mutual fund having billions of dollars in assets will typically invest that money in hundreds of companies, which rarely hold more than one percent of the shares of any particular corporation."

As written, "holding..." seems to modify the preceding clause ("A mutual fund will typically invest, holding...."), giving us more information about how the mutual fund invests the money.

More importantly, notice that we can eliminate (C), (D), (E), since the plural pronoun "they" leads to the illogical meaning that you pointed out. So we are left with (A) and (B).

There is nothing inherently wrong with the "and" in choice (B), but what does "it" refer to? The only singular options are "mutual fund" and "money", and neither of those make much sense (The mutual fund is rare to hold...? The money is rare to hold...?).

Sure, dummy "it" pronouns are sometimes okay on the GMAT. But if "it" doesn't refer to anything in particular, what is the second half of the sentence trying to say? Is it a totally independent statement that has nothing to do with the first half or with mutual funds? It it trying so say something like: "A mutual fund having billions of dollars in assets will typically invest that money in hundreds of companies. Oh, and by the way, did you know that it is rare (for anyone/anything?) to hold at least one percent or more of the shares of any particular corporation?"

Again, the "and" isn't grammatically wrong, but the use of "and" creates an unclear meaning. Also, "at least one percent or more" is redundant, so we have plenty of reasons to choose (A) over (B).

I hope that helps!

Hi all! I am a bit confused by how "rarely" can come before "holding" in Answer Choice A. For participal phrases, my understanding is that the "ing" word must come right after the comma. So, my initial response was that it needed to be "holding rarely" rather than "rarely holding". Thank you!

Exactly that what I was thinking: comma+verbing modifier will modify the preceding clause and not the company or mutual fund !!

A mutual fund having billions of dollars in assets will typically invest that money in hundreds of companies, rarely holding more than one percent of the shares of any particular corporation.


(A) companies, rarely holding more than one percent (correct)

(B) companies, and it is rare to hold at least one percent or more (what is "it" referring to? vague)

(C) companies and rarely do they hold more than one percent ( they doesn't go with the subject companies, which is singular, therefore companies should have a singular pronoun)

(D) companies, so that they rarely hold more than one percent ( same error as C)

(E) companies; rarely do they hold one percent or more (same error as C, additionally the second sentence becomes a fragment sentence due to the semi-colon)

Oh..companies is plural ayeshakhosla1718.