A new company can offer stocks in an initial public offering (IPO) bef

Official Explanation

Conclusion: Stock prices for the Tenon Corporation's IPO, which is planned for next week, will rise.

Premise: If the company seems likely to generate profits, the stock price in the IPO will rise; if the company seems less likely to generate profits, the stock price in the IPO will fall. Today, business analysts announced that the Tenon Corporation has turned a profit in the financial quarter just completed.

Assumptions: There’s no other way to interpret the facts. The fact that the Tenon Corporation has turned a profit in the financial quarter just completed is proof that stock prices for the Tenon Corporation's IPO, which is planned for next week, will rise.

The question stem asks which answer choice most weakens the argument, so this is a weaken question. This passage has an interpretation of evidence reasoning pattern, which can be identified by the presentation of a fact as evidence. The argument premise states that if a company seems likely to generate profits, the stock price in the IPO will rise and today business analysts announced that the Tenon Corporation has turned a profit in the financial quarter just completed. The argument then concludes that stock prices for the Tenon Corporation's IPO, which is planned for next week, will rise.

The standard assumption of an interpretation of evidence reasoning pattern is that there’s no other way to interpret the facts. Because this is a weaken question, the correct answer will demonstrate that there is an alternative explanation for the evidence. In other words, that just because Tenon Corporation has turned a profit in the financial quarter just completed, doesn’t necessarily mean that stock prices for the Tenon Corporation's IPO, which is planned for next week, will rise. Evaluate the answer choices, looking for a choice that matches this idea.

Choice A: No. Companies that do not have profitable quarters are out of scope. The premise indicates that Tenon Corporation has turned a profit in the financial quarter just completed.

Choice B: No. Stock price predictions for the Tenon Corporation’s IPO over the last several months are out of scope. The premise indicates that today business analysts announced that the Tenon Corporation has turned a profit in the financial quarter just completed.

Choice C: No. That The last financial quarter has proven profitable for numerous other companies is out of scope. Profits for other companies have no impact on stock prices for the Tenon Corporation's IPO.

Choice D: Correct. If Industry experts announced today that the raw materials from which the Tenon Corporation manufactures its products will become prohibitively expensive within the next month, then Tenon Corporation may seem less likely to generate profits. If this is the case, the stock price in the IPO will fall. Therefore, this weakens the argument that just because Tenon Corporation has turned a profit in the financial quarter just completed, stock prices for the Tenon Corporation's IPO will rise.

Choice E: No. That Most people who purchase stocks in an IPO decline to attend stockholders’ meetings is out of scope. There is no information regarding people who purchase stocks in an IPO or stockholders’ meetings of the Tenon Corporation.

The correct answer is choice D.