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

It is currently 23 Oct 2014, 23:47

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

The futures market lets investors speculate on future

  Question banks Downloads My Bookmarks Reviews Important topics  
Author Message
TAGS:
Senior Manager
Senior Manager
avatar
Joined: 24 Mar 2011
Posts: 467
Location: Texas
Followers: 4

Kudos [?]: 62 [0], given: 20

The futures market lets investors speculate on future [#permalink] New post 09 Jul 2012, 09:35
00:00
A
B
C
D
E

Difficulty:

(N/A)

Question Stats:

89% (02:54) correct 11% (01:54) wrong based on 52 sessions
The futures market lets investors speculate on future products before they are produced. If a poor pork bellies supply is expected later, pork bellies’ futures prices rise; if a bountiful pork bellies supply is expected, pork bellies futures prices fall. This morning, swineologists predicted an oncoming influx of much-needed slop in the pigpen regions starting tomorrow. Thus, since sufficient slop is essential for the survival of a strong current supply of fuller pork bellies, prices of pork bellies futures will decline dramatically today.



Which of the following, if true, most weakens the argument to the left?


Choices
A Pigs that do not consume adequate slop during the critical growth stage will not produce a full, rich product.
B This fiscal year, pork bellies futures prices have varied more erratically compared to last year.
C The slop that swineologists predict for tomorrow is only expected to be distributed well outside the pigpen areas.
D Today, a press release by pork experts said that the foot-in-mouth disease decimating some of the pork bellies supply will spread widely before the start of the slaughtering season.
E Investors who speculate in pork bellies futures rarely take physical possession of the pork bellies they trade.
2 KUDOS received
Intern
Intern
avatar
Joined: 10 Apr 2012
Posts: 30
Location: Venezuela
Concentration: General Management, Finance
GPA: 3.07
Followers: 1

Kudos [?]: 24 [2] , given: 5

Re: Weaken - Pork Bellies [#permalink] New post 10 Jul 2012, 13:03
2
This post received
KUDOS
I disagree with most of you.
I am pretty sure the correct answer choice is D.

Simply apply the the supply and demand theory and use the information given in the argument.

poor pork bellies supply is expected later --pork bellies’ futures prices rise;
if a bountiful pork bellies supply is expected -- pork bellies futures prices fall

Identify the conclusion of the argument: "prices of pork bellies futures will decline dramatically today."

D speculates little prospect (diseased infection) for supplies, so no way to expect any low prices of pork bellies. If the disease spreads "widely" and more pork bellies die before the start of the slaughtering season then the supply for this year's harvest will go down.

A. INCORRECT. This strengthens the argument.
B. INCORRECT. This answer is not relevant to the conclusion.
C. INCORRECT. This answer would appear to imply that the slop will not be distributed to the pork bellies. There is not enough information for us to make this jump.
D. CORRECT. (explanation above).
E. INCORRECT. This answer is not relevant to the argument.
1 KUDOS received
Intern
Intern
avatar
Joined: 15 Apr 2010
Posts: 48
Followers: 0

Kudos [?]: 18 [1] , given: 10

Re: Weaken - Pork Bellies [#permalink] New post 16 Jul 2012, 01:36
1
This post received
KUDOS
Straight D.

Arg: price relies on the scarcity of goods: more goods produced --> price decreased; less goods produced --> price increased. And, prediction says that the amount of goods produced will increase (due to something that is essential for the survival of goods is much-needed). Arg concludes that price of goods will decrease.

D counters that by saying that, no, another announcement by experts says that there is a disease that will spread on the living goods. It means there are high chances that not a lot of goods will be produced (due to the disease killing them). Therefore it can be hypothesized that price would probably increase because the goods will be scarce. D weakens the conclusion that price of goods will decrease by saying it will increase.
1 KUDOS received
Verbal Forum Moderator
Verbal Forum Moderator
User avatar
Status: Flying over the cloud!
Joined: 16 Aug 2011
Posts: 818
Location: Viet Nam
Concentration: International Business, Marketing
Schools: Ross '17, Duke '16
GMAT Date: 06-06-2014
GPA: 3.07
Followers: 44

Kudos [?]: 240 [1] , given: 43

GMAT ToolKit User Premium Member CAT Tests
Re: Weaken - Pork Bellies [#permalink] New post 16 Jul 2012, 09:20
1
This post received
KUDOS
Sorry guy, I understood the wrong meaning of slop. Now, I believed the correct answer is D, and I agree with the reasoning of santivilla guy above ;)
_________________

Rules for posting in verbal gmat forum, read it before posting anything in verbal forum
Giving me + 1 kudos if my post is valuable with you :)

The more you like my post, the more you share to other's need

CR: Focus of the Week: Must be True Question

Intern
Intern
avatar
Joined: 08 Jul 2012
Posts: 9
GPA: 3.9
WE: Engineering (Energy and Utilities)
Followers: 0

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

Re: Weaken - Pork Bellies [#permalink] New post 09 Jul 2012, 18:10
I think the answer is E. Its because I think the outbreak only affects short term supply, but futures is trading on long term supply. Overall, I think it might still have an effect on the futures, but should be minimal.

I thought it was between C and E, but I opt for E now!
Verbal Forum Moderator
Verbal Forum Moderator
User avatar
Status: Flying over the cloud!
Joined: 16 Aug 2011
Posts: 818
Location: Viet Nam
Concentration: International Business, Marketing
Schools: Ross '17, Duke '16
GMAT Date: 06-06-2014
GPA: 3.07
Followers: 44

Kudos [?]: 240 [0], given: 43

GMAT ToolKit User Premium Member CAT Tests
Re: Weaken - Pork Bellies [#permalink] New post 10 Jul 2012, 00:06
Ingenio wrote:
and why not D ?


Choice D, in contrast, strengthens the argument because the disease makes the farmers who raise pigs will sell them soon, making the decline in the price of pork bellies.

Choice E shows only about the roles of characters in the argument, irrelevant to the price as well as the market of pork bellies.

Choice C instead shows that the slop does NOT affect the pigpen anyway, not affecting negatively to the pig, not make decline in the price of pork bellies. Therefore, choice C is the best choice.
_________________

Rules for posting in verbal gmat forum, read it before posting anything in verbal forum
Giving me + 1 kudos if my post is valuable with you :)

The more you like my post, the more you share to other's need

CR: Focus of the Week: Must be True Question

Senior Manager
Senior Manager
User avatar
Joined: 15 Sep 2009
Posts: 271
GMAT 1: 750 Q V
Followers: 9

Kudos [?]: 55 [0], given: 6

Re: Weaken - Pork Bellies [#permalink] New post 10 Jul 2012, 00:48
Why would you want to pick E at all? What has physical possession of pork supplies got to do with futures prices of pork, per the premises?

Close run between C and D; both answers have their strengths.

C is pertinent to the given premises, and weakens the conclusion since adequate supply of slop will not reach the pigpen regions.

D relies on outside information to weaken the argument that prices will decline. D might be a slightly better answer since it reinforces the idea that prices will not decline TODAY due to the F&M disease reports.

What's the source of this question?

Cheers,
Der alte Fritz.
_________________

+1 Kudos me - I'm half Irish, half Prussian.

Director
Director
User avatar
Status: Final Countdown
Joined: 17 Mar 2010
Posts: 564
Location: India
GPA: 3.82
WE: Account Management (Retail Banking)
Followers: 13

Kudos [?]: 144 [0], given: 75

Re: Weaken - Pork Bellies [#permalink] New post 10 Jul 2012, 01:00
more slop--->a strong current supply of fuller pork bellies--->prices of pork bellies futures will decline
to weaken this, we need to show that there will not be any decline even if the supply of slop is more
(C) suits the reasoning.
_________________

" Make more efforts "
Press Kudos if you liked my post

Manager
Manager
avatar
Joined: 10 May 2012
Posts: 58
GMAT Date: 09-10-2012
Followers: 0

Kudos [?]: 9 [0], given: 14

Re: The futures market lets investors speculate on future [#permalink] New post 25 Jul 2012, 07:57
Nice explanation by santivilla and catennacio.

Kudos to both of you. :)
Re: The futures market lets investors speculate on future   [#permalink] 25 Jul 2012, 07:57
    Similar topics Author Replies Last post
Similar
Topics:
Experts publish their posts in the topic Crops can be traded on the futures market before they are Narenn 0 27 Jan 2013, 02:01
Crops can be traded on the futures market before they are ruturaj 0 08 Jun 2011, 21:04
The investor who is uncertain about the future is more wonderland130 11 31 Mar 2010, 08:46
3 Crops can be traded on the futures market before they are vksunder 12 18 Jul 2008, 01:16
MBA Futures Market johnnyx9 8 27 Feb 2007, 06:14
Display posts from previous: Sort by

The futures market lets investors speculate on future

  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®.