Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized for You

we will pick new questions that match your level based on your Timer History

Track Your Progress

every week, we’ll send you an estimated GMAT score based on your performance

Practice Pays

we will pick new questions that match your level based on your Timer History

Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.

It appears that you are browsing the GMAT Club forum unregistered!

Signing up is free, quick, and confidential.
Join other 500,000 members and get the full benefits of GMAT Club

Registration gives you:

Tests

Take 11 tests and quizzes from GMAT Club and leading GMAT prep companies such as Manhattan GMAT,
Knewton, and others. All are free for GMAT Club members.

Applicant Stats

View detailed applicant stats such as GPA, GMAT score, work experience, location, application
status, and more

Books/Downloads

Download thousands of study notes,
question collections, GMAT Club’s
Grammar and Math books.
All are free!

Thank you for using the timer!
We noticed you are actually not timing your practice. Click the START button first next time you use the timer.
There are many benefits to timing your practice, including:

Advertisement: Last year, Factorial Mutual Fund continued [#permalink]

Show Tags

07 Oct 2012, 13:53

2

This post received KUDOS

00:00

A

B

C

D

E

Difficulty:

5% (low)

Question Stats:

81% (01:56) correct
19% (00:48) wrong based on 299 sessions

HideShow timer Statistics

Advertisement: Last year, Factorial Mutual Fund continued its strong record of investment performance. Investors who included Factorial Fund in their portfolios realized an average capital gain of 15% across all of their investment assets, nearly double the market return. Therefore, investors interested in high returns should consider adding Factorial Mutual Fund to their portfolios.

The claim in the advertisement above is based on which of the following assumptions?

Factorial Fund is one of the oldest and largest mutual funds in the investment industry.

A substantial part of the 15% portfolio appreciation was attributable to the returns of Factorial Fund and this level of fund’s performance is likely to persist in the future.

Last year, Factorial Fund outperformed all other funds with similar style and investment objectives.

The Fund is suitable to all investors.

The fees charged by Factorial Fund are among the lowest in the investment industry.

Re: Advertisement: Last year, Factorial Mutual Fund [#permalink]

Show Tags

07 Oct 2012, 22:50

Advertisement: Last year, Factorial Mutual Fund continued its strong record of investment performance. Investors who included Factorial Fund in their portfolios realized an average capital gain of 15% across all of their investment assets, nearly double the market return. Therefore, investors interested in high returns should consider adding Factorial Mutual Fund to their portfolios.

The claim in the advertisement above is based on which of the following assumptions?

Factorial Fund is one of the oldest and largest mutual funds in the investment industry.

A substantial part of the 15% portfolio appreciation was attributable to the returns of Factorial Fund and this level of fund’s performance is likely to persist in the future.

Last year, Factorial Fund outperformed all other funds with similar style and investment objectives.

The Fund is suitable to all investors.

The fees charged by Factorial Fund are among the lowest in the investment industry.

The assumption is that the fund will continue to perform in the same was as in the past. B wins.

Re: Advertisement: Last year, Factorial Mutual Fund [#permalink]

Show Tags

07 Oct 2012, 23:51

I agree with your point and the same thought i also have , but my question is whats wrong with the assumption that " it will poerform in same manner woth all investors" you negate it and conclusion will not stand lets try Conclusion : Investors should invest in fund if they want to book profit Negate: It will not perform in same manner to all i.e. profit can be varying for investors hence the conclusion falls

Correct me if i am wrong these are closely placed answers and to master gmat we need to master shell game of gmat these options can play crucial role in tight time constrain. Hence i bit wary about it nad want to have clear understanding

Advertisement: Last year, Factorial Mutual Fund continued its strong record of investment performance. Investors who included Factorial Fund in their portfolios realized an average capital gain of 15% across all of their investment assets, nearly double the market return. Therefore, investors interested in high returns should consider adding Factorial Mutual Fund to their portfolios.

The claim in the advertisement above is based on which of the following assumptions? (A) Factorial Fund is one of the oldest and largest mutual funds in the investment industry. (B) A substantial part of the 15% portfolio appreciation was attributable to the returns of Factorial Fund and this level of fund’s performance is likely to persist in the future. (C) Last year, Factorial Fund outperformed all other funds with similar style and investment objectives. (D) The Fund is suitable to all investors. (E) The fees charged by Factorial Fund are among the lowest in the investment industry.

Dear Archit143,

It seems you understand that (B) is the strongest answer, but you want to know what is wrong with (D).

First of all, I will say: you are missing the forest for the trees. You are getting so caught on picayune details that you are missing the big picture. This tells me you have too much experience with GMAT CR arguments and not enough experience with real-world arguments. It appears you have hit a point of diminishing returns with GMAT CR questions, at which the study of them can do as much harm as good. You really need to balance your perspective by getting an excellent grounding in real world economic arguments. Read the WSJ, the NYT, and the Economist magazine. Read about the real push-and-pull in the world. That will give you the broader perspective you are missing right now.

In this problem --- the broader perspective is: this guy wants to sell me this mutual fund. His evidence --- "Investors who included Factorial Fund in their portfolios realized an average capital gain of 15% across all of their investment assets" ---- wait a moment! Huge logical leap! If those folks had several stocks & bonds & funds in their portfolio besides Factorial Fund, why on earth would we attribute the success of the portfolio overall to the presence of Factorial Fund. If I own, say, $200 in Factorial Fund and $5000 in Apple, and the Apple goes through the roof, yes, I make a big profit, but what does that profit have to do with the little bit of Factorial Fund I had? That is the huge gaping hole in this argument. That is precisely the hole that needs to be addressed. That's why (B) is the clear choice for the correct answer.

As for (D), check your own assumptions and careful reading. The argument does not say: "investors interested in high returns should add Factorial Mutual Fund to their portfolios." (That would be way to strong for the CR section.) Rather, it says: "investors interested in high returns should consider adding Factorial Mutual Fund to their portfolios." Presumably, a big part of what each investor should consider is whether Factorial Fund is suitable to her own portfolio. Therefore, automatic suitability is not an assumption. ----------- Suppose (D) is not correct: suppose Factorial Fund is suitable, say, for 98% of investors, but not that last 2%. How much do you know about real-world advertising? Well, any ad that appeals to 98% of the population is an unbelievably successful ad, successful beyond all reasonable expectations! If Factorial Fund is really as good as the Advertisement claims --- that is to say, if assumption (B) is really true --- then indeed every investor should consider it, simply because it's so good, and only those investors who find it is not suitable for their portfolios should choose not to include it --- in other words, finding out it's not suitable would be the one and only one reason not to include it. Those are all interpretations by which (D) can be false and the argument can still retain its full strength. (D) is in no way an assumption upon which the strength of the argument depends.

Re: Advertisement: Last year, Factorial Mutual Fund continued [#permalink]

Show Tags

10 Jul 2014, 12:00

Hello from the GMAT Club VerbalBot!

Thanks to another GMAT Club member, I have just discovered this valuable topic, yet it had no discussion for over a year. I am now bumping it up - doing my job. I think you may find it valuable (esp those replies with Kudos).

Want to see all other topics I dig out? Follow me (click follow button on profile). You will receive a summary of all topics I bump in your profile area as well as via email.

Re: Advertisement: Last year, Factorial Mutual Fund continued [#permalink]

Show Tags

21 Mar 2016, 10:52

Hello from the GMAT Club VerbalBot!

Thanks to another GMAT Club member, I have just discovered this valuable topic, yet it had no discussion for over a year. I am now bumping it up - doing my job. I think you may find it valuable (esp those replies with Kudos).

Want to see all other topics I dig out? Follow me (click follow button on profile). You will receive a summary of all topics I bump in your profile area as well as via email.

gmatclubot

Re: Advertisement: Last year, Factorial Mutual Fund continued
[#permalink]
21 Mar 2016, 10:52

After days of waiting, sharing the tension with other applicants in forums, coming up with different theories about invites patterns, and, overall, refreshing my inbox every five minutes to...

I was totally freaking out. Apparently, most of the HBS invites were already sent and I didn’t get one. However, there are still some to come out on...

There is without a doubt a stereotype for recent MBA grads – folks who are ambitious, smart, hard-working, but oftentimes lack experience or domain knowledge. Looking around and at...