A survey of alumni of the class of 1960 at Aurora University yielded

boiled down to A and E.
A is more direct with the passage. The key word is "high ranking alumni"

A survey of alumni of the class of 1960 at Aurora University yielded puzzling results. When asked to indicate their academic rank, half of the respondents reported that they were in the top quarter of the graduating class in 1960.

This is a resolve the paradox type of question. Both the statements provided in the stimulus are background information. The argument states that half of the respondents reported being in the top quarter of the graduating class, i.e, If there are 100 students then half of the respondents of the survey claimed that they were among the top 25. Now, this could be possible if say the respondents consisted a majority of those people only who were actually among the high ranked ones. So, this half proportion from the high ranked base could constitute a quarter of the total base (including non respondents). Suppose 50 was the respondent base and 25 of these were high ranked ones, making the proportion half. These 25 also constitute a quarter of the total 100. This is exactly provided to us by option, hence, that is the answer.

Other options aren't relevant. Option B states that few respondents were mistaken about their rank. However, it will still not justify how half claimed to be in top quarter.

For questions dealing with sample size, proportions, percentages, counts, it is always preferable to target the base.

The discrepancy in this stimulus is that half the respondents to an alumni survey reported they were in the top quartile of the class. How can half fit into a quartile?

--The discrepancy in this stimulus is that half the alumni reported they were in the top quartile of the class.

See the difference? The real stimulus (the top one) is about the folks that responded to a survey. Perhaps only the smarties responded. Let's imagine there were 100 people in the class, and 50 responded to the survey. If all the top 25 students responded, that would make up half the respondents, even though they're a quarter of the whole class. This is what (A) hinges on.

(B) is tempting if you thought that the solution had to be that folks were lying or delusional about their ranking. But (B) tells us that most people were correct!
The negation of B could work as an explanation

(C) is in some ways the reverse of (A). We need to see a higher proportion of smarties responding, not fewer of them.

(D) makes the discrepancy harder to explain. If almost everyone responded, than how did a half fit into a quarter?!

(E) is out of scope. Who cares how they calculated the grades?

VeritasKarishma - Can you explain A answer choice here with an example.

Thanks

Let me help you with that.
Let's assume we have class size of 100. All received the survey link(let's say) but not all responded. For example, 50 responded. Among those, all upto top 25th rank holders responded and rest 25 were from rest of the 75 members.

The above situation helps explain why such a possibility existed.

HTH.

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