Find all School-related info fast with the new School-Specific MBA Forum

It is currently 18 Sep 2014, 12:23

Close

GMAT Club Daily Prep

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.

Events & Promotions

Events & Promotions in June
Open Detailed Calendar

Based upon the results of a recent study, the net value of

  Question banks Downloads My Bookmarks Reviews Important topics  
Author Message
TAGS:
Senior Manager
Senior Manager
avatar
Joined: 12 Oct 2009
Posts: 272
Schools: Columbia, INSEAD, RSM, LBS
Followers: 2

Kudos [?]: 33 [0], given: 4

GMAT Tests User
Based upon the results of a recent study, the net value of [#permalink] New post 15 Oct 2009, 02:12
00:00
A
B
C
D
E

Difficulty:

(N/A)

Question Stats:

36% (01:50) correct 64% (01:32) wrong based on 12 sessions
Based upon the results of a recent study, the net value of assets held by young adults or for the benefit of young adults exceeds the net value of assets held by middle-age working professionals with children. The common notion that young adults or so-called "twenty somethings" are bigger spenders and smaller savers than middle-age adults is, therefore, false.

The argument is primarily flawed for which of the following reasons?

A) The argument does not properly consider the impact of the debt financing of assets.

B) The argument never discusses the effects of filing for bankruptcy and twenty somethings' proclivity for deficit spending leading to bankruptcy.

C) The argument never discusses the role that the country's tax code, which encourages financial investment on the part of twenty somethings, plays.

D) The argument does not specify the exact amounts of saving and spending on the part of each age group.

E) The argument never considers that the study compares assets held both by or for the benefit of young adults with assets held by working adults.
Director
Director
User avatar
Joined: 01 Apr 2008
Posts: 909
Schools: IIM Lucknow (IPMX) - Class of 2014
Followers: 15

Kudos [?]: 214 [0], given: 18

GMAT Tests User
Re: CR Question : Savings comparision [#permalink] New post 15 Oct 2009, 02:52
D for me.
IEsailor wrote:
Based upon the results of a recent study, the net value of assets held by young adults or for the benefit of young adults exceeds the net value of assets held by middle-age working professionals with children. The common notion that young adults or so-called "twenty somethings" are bigger spenders and smaller savers than middle-age adults is, therefore, false.

The argument is primarily flawed for which of the following reasons?

A) The argument does not properly consider the impact of the debt financing of assets.
>> consideration of 'impact' is not required
B) The argument never discusses the effects of filing for bankruptcy and twenty somethings' proclivity for deficit spending leading to bankruptcy.
>> consideration of 'effects' is not required
C) The argument never discusses the role that the country's tax code, which encourages financial investment on the part of twenty somethings, plays.
>> role of tax adds nothing
D) The argument does not specify the exact amounts of saving and spending on the part of each age group.

E) The argument never considers that the study compares assets held both by or for the benefit of young adults with assets held by working adults.
>> study actually compares held by both entities.
Manager
Manager
avatar
Affiliations: CFA Level 2 Candidate
Joined: 29 Jun 2009
Posts: 223
Schools: RD 2: Darden Class of 2012
Followers: 3

Kudos [?]: 54 [0], given: 2

GMAT Tests User
Re: CR Question : Savings comparision [#permalink] New post 15 Oct 2009, 06:26
I will go with E

A-C are irrelevant to the topic at hand.

Between D and E

I believe E weakens the argument the most - the groups are not comparable as you are comparing one group of saving youth and $ held in their trust to saving adults. This comparison is unfair. As a higher portion of the dollars could be in the trust account.

I could argue exact D because we don't really care about the "exact" amount. Clearly an adult will, on average, spend more than a youth.
Senior Manager
Senior Manager
avatar
Joined: 12 Oct 2009
Posts: 272
Schools: Columbia, INSEAD, RSM, LBS
Followers: 2

Kudos [?]: 33 [0], given: 4

GMAT Tests User
Re: CR Question : Savings comparision [#permalink] New post 15 Oct 2009, 06:57
OA is E
Director
Director
User avatar
Joined: 24 Aug 2007
Posts: 956
WE 1: 3.5 yrs IT
WE 2: 2.5 yrs Retail chain
Followers: 54

Kudos [?]: 711 [0], given: 40

GMAT Tests User
Re: CR Question : Savings comparision [#permalink] New post 05 Jun 2010, 07:57
I am not convinced with E and marked D, though it is correct OA.

In the beginning, we are given a comparison b/w NAV of young adult and NVA of WP. So, how does E leads to a flaw?

Can someone throw some light on this reasoning?

Economist wrote:
D for me.
IEsailor wrote:
Based upon the results of a recent study, the net value of assets held by young adults or for the benefit of young adults exceeds the net value of assets held by middle-age working professionals with children. The common notion that young adults or so-called "twenty somethings" are bigger spenders and smaller savers than middle-age adults is, therefore, false.

The argument is primarily flawed for which of the following reasons?

A) The argument does not properly consider the impact of the debt financing of assets.
>> consideration of 'impact' is not required
B) The argument never discusses the effects of filing for bankruptcy and twenty somethings' proclivity for deficit spending leading to bankruptcy.
>> consideration of 'effects' is not required
C) The argument never discusses the role that the country's tax code, which encourages financial investment on the part of twenty somethings, plays.
>> role of tax adds nothing
D) The argument does not specify the exact amounts of saving and spending on the part of each age group.

E) The argument never considers that the study compares assets held both by or for the benefit of young adults with assets held by working adults.
>> study actually compares held by both entities.

_________________

Want to improve your CR: cr-methods-an-approach-to-find-the-best-answers-93146.html
Tricky Quant problems: 50-tricky-questions-92834.html
Important Grammer Fundamentals: key-fundamentals-of-grammer-our-crucial-learnings-on-sc-93659.html


Last edited by ykaiim on 12 Jun 2010, 05:58, edited 1 time in total.
SVP
SVP
avatar
Joined: 17 Feb 2010
Posts: 1561
Followers: 12

Kudos [?]: 211 [0], given: 6

Re: CR Question : Savings comparision [#permalink] New post 08 Jun 2010, 10:50
I narrowed it to B and E and picked (B).

Can someone explain why B is incorrect.

I thought because the argument is making a connection between the high net value of assets of young adults and their high spending habits we have to find an answer which will explain this flaw.
Senior Manager
Senior Manager
avatar
Joined: 24 Mar 2011
Posts: 469
Location: Texas
Followers: 4

Kudos [?]: 56 [0], given: 20

Re: CR Question : Savings comparision [#permalink] New post 13 Jun 2011, 16:38
The Q is very tricky and strange also.
This is the OE for this -

The fundamental flaw in the argument is that it is comparing unlike parts. Specifically, the argument is comparing the net value of assets held by or in the name of a group with the net value of assets held by (and not in the name of) another group. It is quite possible that the large value of assets held for children or beneficiaries (e.g., trusts and estates) comprise large amounts of money.

a. The argument notes that the study considered "the net value of assets" (i.e., assets minus liabilities). Consequently, the study did adequately account for the role of debt in acquiring assets.
b. Eliminating one's debt via bankruptcy would not be unique to the twenty something demographic nor would debt spending change the value of net assets held in one's name.
c. The information about the tax code does not undermine the conclusion of the study. Instead, it simply provides an explanation for why the value of assets (not necessarily net assets) is larger than expected among twenty somethings (i.e., tax incentives fueled it).
d. The argument is not based upon the exact amount of spending between age groups. Rather, the argument is based upon relative spending and saving between age groups.
e. The argument compares the assets held by and for the benefit of someone with the assets held by (and not for) a different type of person. This unlike comparison is not sufficient logical grounds to make an argument comparing the two groups.
1 KUDOS received
Manager
Manager
avatar
Joined: 16 Mar 2011
Posts: 189
Followers: 1

Kudos [?]: 4 [1] , given: 1

GMAT Tests User
Re: CR Question : Savings comparision [#permalink] New post 13 Jun 2011, 16:51
1
This post received
KUDOS
E is correct and D is wrong even though it does sound promising. knowing the totals will not help you since the stem already says that the net is higher for the young adults. the problem comes from the shift that is made in the argument. first we have that the amount they save(A) + the amount that is being saved for their benefit (B) is higher than the other group (C)...then the argument shifts to make a conclusion about the amount the young adults save only....

simplify:

A+B>C then it concludes that A can not be smaller than C... when it actually could be since the stem didn't take this into account when coming up with the final conclusion
VP
VP
avatar
Status: There is always something new !!
Affiliations: PMI,QAI Global,eXampleCG
Joined: 08 May 2009
Posts: 1365
Followers: 11

Kudos [?]: 140 [0], given: 10

GMAT Tests User
Re: CR Question : Savings comparision [#permalink] New post 13 Jun 2011, 20:50
Good question indeed.
Narrowed to B and E and picked B instead.I considered that assets were actually discussed,based on this the conclusion of the argument was derived.That's why I POE'ed E.
_________________

Visit -- http://www.sustainable-sphere.com/
Promote Green Business,Sustainable Living and Green Earth !!

Intern
Intern
avatar
Joined: 22 Sep 2010
Posts: 29
Followers: 0

Kudos [?]: 3 [0], given: 5

Re: CR Question : Savings comparision [#permalink] New post 12 Sep 2011, 17:38
I got it wrong, but I dont understand the reasoning.

Conclusion is : The common notion that young adults or so-called "twenty somethings" are bigger spenders and smaller savers than middle-age adults is, therefore, false.

Even if they have more assets, how can we be sure they dont spend even more ?

Suppose they have 200$ at their disposal, out of which they spend 150$. On the other hand, adults have 100$ and they spend 25$, our conclusion would still hold true !

If we know the exact spending and savings, we can say whether they spend more or not.
Re: CR Question : Savings comparision   [#permalink] 12 Sep 2011, 17:38
    Similar topics Author Replies Last post
Similar
Topics:
4 Based upon the results of a recent study, the net value of Ivan91 7 26 Mar 2013, 23:24
Based upon the results of a recent study, the net value of eybrj2 2 14 Dec 2011, 22:57
4 Experts publish their posts in the topic The results of two recent unrelated studies support the idea vivek123 15 26 Dec 2005, 09:13
1 Many teenagers undergo stress, but results of a recent study ronybtl 12 19 Nov 2005, 07:29
Recently implemented "shift-work equations" based on studies qhoc0010 8 03 Dec 2004, 14:59
Display posts from previous: Sort by

Based upon the results of a recent study, the net value of

  Question banks Downloads My Bookmarks Reviews Important topics  


GMAT Club MBA Forum Home| About| Privacy Policy| Terms and Conditions| GMAT Club Rules| Contact| Sitemap

Powered by phpBB © phpBB Group and phpBB SEO

Kindly note that the GMAT® test is a registered trademark of the Graduate Management Admission Council®, and this site has neither been reviewed nor endorsed by GMAC®.