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(A) Stella Adler was one of the most influential artists in the American theater, who trained several generations of actors including
The first issue is that the phrase beginning with "who" is right next to "the American theater", and that doesn't really make sense. "The American theater" isn't a person, and it didn't train generations of actors. Sure, you could maybe argue that "who trained several generations of actors..." reaches back to modify the entire phrase "one of the most influential artists in the American theater", but that's far messier than just modifying "Stella Adler", who is actually the one who trained the actors. We can argue about whether this is definitively WRONG, but at the very least, we can do better than this.
The second issue is that "including" seems to modify "several
generations of actors", and that doesn't really make sense: Marlon Brando and Robert De Niro are examples of actors, not "generations of actors." It's subtle -- and probably not the worst error we've ever seen on a GMAT SC question -- but it makes (A) worse than at least one of the alternatives below.
So we can get rid of (A).
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(B) Stella Adler, one of the most influential artists in the American theater, trained several generations of actors who include
There's still a minor problem with the very last part of the underlined portion: "several generations of actors who include Marlon Brando and Robert De Niro" sounds OK, because those two fellows are examples of actors, but then why are we saying "generations of actors"? Brando and De Niro are examples of actors, not "generations of actors." And there's another problem: "include" is present tense, and it's hard to justify the use of present tense here when the other action related to the actors occurred in the past tense ("trained").
And if you aren't completely sold by that last paragraph, there's something else at the beginning of the sentence: "as an actress... Stella Adler... trained several generations of actors." No, she only "trained generations of actors" as a "teacher of acting" -- not "as an actress." Subtle and nasty. But (B) is out.
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(C) Stella Adler was one of the most influential artists in the American theater, training several generations of actors whose ranks included
That opening modifier makes sense now: "as an actress and... as a teacher of acting, Stella Adler was one of the most influential artists..." Cool, that's great. The modifier "training several generations of actors..." also makes sense: it modifies the previous clause, telling us more about Stella Adler and her life as "one of the most influential artists in the American theater.
Superficially, that last part of the underlined portion looks wordy: "several generations of actors whose ranks included..." But adding the phrase "whose ranks included" actually makes the phrase clearer than in (A) or (B): Brando and De Niro were among the
ranks of those generations of actors. Fair enough.
So we can keep (C).
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(D) one of the most influential artists in the American theater was Stella Adler, who trained several generations of actors including
The underlined portion is preceded by "as an actress and... as a teacher of acting", a phrase that really needs to modify "Stella Adler." It's ridiculously indirect for that phrase to modify "one of the most influential artists in the American theater." So (D) is much less clear than (C) in that part of the sentence.
Plus, we have the same minor issue with the phrase "generations of actors including..." as we did in (A). See above for more on that issue.
So (D) is gone.
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(E) one of the most influential artists in the American theater, Stella Adler, trained several generations of actors whose ranks included
(E) has the same problem as (D): the beginning of the sentence needs to modify "Stella Adler." More broadly, "Stella Adler" really needs to be the subject of the sentence, since she's the one that trained the generations of actors -- and it's an indirect mess to use "one of the most influential artists..." as the subject of the sentence.
So (E) is out, and (C) is the best option.
As "who" is the subject of the second clause, can it refer back to the subject of the previous clause?? i.e. 'Stella Adler'