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Based upon the results of a recent study, the net value of

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Senior Manager
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Based upon the results of a recent study, the net value of [#permalink]

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15 Oct 2009, 03:12
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Based upon the results of a recent study, the net value of assets held by young adults or for the benefit of young adults exceeds the net value of assets held by middle-age working professionals with children. The common notion that young adults or so-called "twenty somethings" are bigger spenders and smaller savers than middle-age adults is, therefore, false.

The argument is primarily flawed for which of the following reasons?

A) The argument does not properly consider the impact of the debt financing of assets.

B) The argument never discusses the effects of filing for bankruptcy and twenty somethings' proclivity for deficit spending leading to bankruptcy.

C) The argument never discusses the role that the country's tax code, which encourages financial investment on the part of twenty somethings, plays.

D) The argument does not specify the exact amounts of saving and spending on the part of each age group.

E) The argument never considers that the study compares assets held both by or for the benefit of young adults with assets held by working adults.

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Re: CR Question : Savings comparision [#permalink]

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15 Oct 2009, 03:52
D for me.
IEsailor wrote:
Based upon the results of a recent study, the net value of assets held by young adults or for the benefit of young adults exceeds the net value of assets held by middle-age working professionals with children. The common notion that young adults or so-called "twenty somethings" are bigger spenders and smaller savers than middle-age adults is, therefore, false.

The argument is primarily flawed for which of the following reasons?

A) The argument does not properly consider the impact of the debt financing of assets.
>> consideration of 'impact' is not required
B) The argument never discusses the effects of filing for bankruptcy and twenty somethings' proclivity for deficit spending leading to bankruptcy.
>> consideration of 'effects' is not required
C) The argument never discusses the role that the country's tax code, which encourages financial investment on the part of twenty somethings, plays.
>> role of tax adds nothing
D) The argument does not specify the exact amounts of saving and spending on the part of each age group.

E) The argument never considers that the study compares assets held both by or for the benefit of young adults with assets held by working adults.
>> study actually compares held by both entities.

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Re: CR Question : Savings comparision [#permalink]

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15 Oct 2009, 07:26
I will go with E

A-C are irrelevant to the topic at hand.

Between D and E

I believe E weakens the argument the most - the groups are not comparable as you are comparing one group of saving youth and \$ held in their trust to saving adults. This comparison is unfair. As a higher portion of the dollars could be in the trust account.

I could argue exact D because we don't really care about the "exact" amount. Clearly an adult will, on average, spend more than a youth.

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Senior Manager
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Re: CR Question : Savings comparision [#permalink]

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15 Oct 2009, 07:57
OA is E

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Re: CR Question : Savings comparision [#permalink]

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05 Jun 2010, 08:57
I am not convinced with E and marked D, though it is correct OA.

In the beginning, we are given a comparison b/w NAV of young adult and NVA of WP. So, how does E leads to a flaw?

Can someone throw some light on this reasoning?

Economist wrote:
D for me.
IEsailor wrote:
Based upon the results of a recent study, the net value of assets held by young adults or for the benefit of young adults exceeds the net value of assets held by middle-age working professionals with children. The common notion that young adults or so-called "twenty somethings" are bigger spenders and smaller savers than middle-age adults is, therefore, false.

The argument is primarily flawed for which of the following reasons?

A) The argument does not properly consider the impact of the debt financing of assets.
>> consideration of 'impact' is not required
B) The argument never discusses the effects of filing for bankruptcy and twenty somethings' proclivity for deficit spending leading to bankruptcy.
>> consideration of 'effects' is not required
C) The argument never discusses the role that the country's tax code, which encourages financial investment on the part of twenty somethings, plays.
>> role of tax adds nothing
D) The argument does not specify the exact amounts of saving and spending on the part of each age group.

E) The argument never considers that the study compares assets held both by or for the benefit of young adults with assets held by working adults.
>> study actually compares held by both entities.

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Last edited by ykaiim on 12 Jun 2010, 06:58, edited 1 time in total.

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Re: CR Question : Savings comparision [#permalink]

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08 Jun 2010, 11:50
I narrowed it to B and E and picked (B).

Can someone explain why B is incorrect.

I thought because the argument is making a connection between the high net value of assets of young adults and their high spending habits we have to find an answer which will explain this flaw.

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Re: CR Question : Savings comparision [#permalink]

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13 Jun 2011, 17:38
The Q is very tricky and strange also.
This is the OE for this -

The fundamental flaw in the argument is that it is comparing unlike parts. Specifically, the argument is comparing the net value of assets held by or in the name of a group with the net value of assets held by (and not in the name of) another group. It is quite possible that the large value of assets held for children or beneficiaries (e.g., trusts and estates) comprise large amounts of money.

a. The argument notes that the study considered "the net value of assets" (i.e., assets minus liabilities). Consequently, the study did adequately account for the role of debt in acquiring assets.
b. Eliminating one's debt via bankruptcy would not be unique to the twenty something demographic nor would debt spending change the value of net assets held in one's name.
c. The information about the tax code does not undermine the conclusion of the study. Instead, it simply provides an explanation for why the value of assets (not necessarily net assets) is larger than expected among twenty somethings (i.e., tax incentives fueled it).
d. The argument is not based upon the exact amount of spending between age groups. Rather, the argument is based upon relative spending and saving between age groups.
e. The argument compares the assets held by and for the benefit of someone with the assets held by (and not for) a different type of person. This unlike comparison is not sufficient logical grounds to make an argument comparing the two groups.

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Re: CR Question : Savings comparision [#permalink]

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13 Jun 2011, 17:51
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KUDOS
E is correct and D is wrong even though it does sound promising. knowing the totals will not help you since the stem already says that the net is higher for the young adults. the problem comes from the shift that is made in the argument. first we have that the amount they save(A) + the amount that is being saved for their benefit (B) is higher than the other group (C)...then the argument shifts to make a conclusion about the amount the young adults save only....

simplify:

A+B>C then it concludes that A can not be smaller than C... when it actually could be since the stem didn't take this into account when coming up with the final conclusion

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Re: CR Question : Savings comparision [#permalink]

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13 Jun 2011, 21:50
Good question indeed.
Narrowed to B and E and picked B instead.I considered that assets were actually discussed,based on this the conclusion of the argument was derived.That's why I POE'ed E.
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Re: CR Question : Savings comparision [#permalink]

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12 Sep 2011, 18:38
I got it wrong, but I dont understand the reasoning.

Conclusion is : The common notion that young adults or so-called "twenty somethings" are bigger spenders and smaller savers than middle-age adults is, therefore, false.

Even if they have more assets, how can we be sure they dont spend even more ?

Suppose they have 200\$ at their disposal, out of which they spend 150\$. On the other hand, adults have 100\$ and they spend 25\$, our conclusion would still hold true !

If we know the exact spending and savings, we can say whether they spend more or not.

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Re: Based upon the results of a recent study, the net value of [#permalink]

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11 Apr 2015, 10:34
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