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After the stock market of Country X crashed, the president took to the

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After the stock market of Country X crashed, the president took to the [#permalink]

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New post 24 Mar 2017, 23:55
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Difficulty:

  55% (hard)

Question Stats:

56% (01:35) correct 44% (01:18) wrong based on 129 sessions

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After the stock market of Country X crashed, the president took to the airwaves to claim that the crash occurred due to the foolish lending practices of mortgage companies. The president argued that the companies issued too many high risk loans and had to default on many of them, leading to the crash.

Which of the following investigations, if it could be carried out, would be most useful in an evaluation of the president of Country X’s claim?
A. figuring out the average amount of the loans the mortgage companies defaulted on
B. attempting to predict the most likely date of the country’s economic recovery
C. calculating exactly how many high risk loans were issued by the mortgage companies
D. analyzing the effects of comparable loan defaults in other countries with economies similar to Country X’s
E. comparing the effects of the crash on the mortgage companies to the effects on the individuals who received the loans


Source: McGraw-Hill's GMAT
[Reveal] Spoiler: OA

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Re: After the stock market of Country X crashed, the president took to the [#permalink]

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New post 04 Aug 2017, 12:42
The president is arguing that the crash occurred due to the foolish lending practices of mortgage companies. So there are two layers to this. First is that the mortgage companies screwed up by making to many high-risk loans. Second is that their mistake caused the crash.

It's tricky between C and D because C would tell us a piece of what we needed to know to determine whether the mortgage companies were foolish. C falls short, though, because it doesn't tell us how many loans in total they made or what a safe ratio would be.

D is correct because it would help tell us whether the defaults on their high-risk loans caused the crash. For example, if a similar number of high-risk-loan defaults in a similar country did not cause a crash in that country, then it may not be the cause of this crash.
Re: After the stock market of Country X crashed, the president took to the   [#permalink] 04 Aug 2017, 12:42
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After the stock market of Country X crashed, the president took to the

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