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Because most investors prefer long term capital gains

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Because most investors prefer long term capital gains [#permalink]

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New post 08 Jul 2017, 12:27
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Difficulty:

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Question Stats:

29% (00:59) correct 71% (01:00) wrong based on 271 sessions

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Because most investors prefer long term capital gains to annual dividend payouts, the reduction in dividend payout ratios that have taken place during the last decade are perfectly understandable.

a. the reduction in dividend payout ratios that have taken place during the last decade are
b. the reduction in dividend payout ratios that has taken place during the last decade is
c. the reduction that has taken place in dividend payout ratios during the last decades are
d. the reduction in dividend payout ratios that have taken place during the last decade is
e. the reduction that has taken place in dividend payout ratios during the last decades is
[Reveal] Spoiler: OA

Last edited by Turkish on 08 Jul 2017, 15:22, edited 2 times in total.

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Re: Because most investors prefer long term capital gains [#permalink]

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New post 08 Jul 2017, 12:33
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Turkish wrote:
Because most investors prefer long term capital gains to annual dividend payouts, the reduction in dividend payout ratios that have taken place during the last decade are perfectly understandable.

a. the reduction in dividend payout ratios that have taken place during the last decade are
b. the reduction in dividend payout ratios that has taken place during the last decade is
c. the reduction that has taken place in dividend payout ratios during the last decades are
d. the reduction in dividend payout ratios that have taken place during the last decade is
e. the reduction that has taken place in dividend payout during the last decades is


The reduction... is...
Ratios... have..

D is correct IMO.
What's the OA?
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Re: Because most investors prefer long term capital gains [#permalink]

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New post 08 Jul 2017, 12:37
The reduction ....is ....that has...

IMO B


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Re: Because most investors prefer long term capital gains [#permalink]

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New post 08 Jul 2017, 15:02
E is missing important info "ratios" from its structure although i must agree since "reduction is taking place" so E seems promising.

d. the reduction in dividend payout ratios that have taken place during the last decade is
e. the reduction that has taken place in dividend payout ratios during the last decades is
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Re: Because most investors prefer long term capital gains [#permalink]

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New post 08 Jul 2017, 17:34
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Turkish wrote:
Because most investors prefer long term capital gains to annual dividend payouts, the reduction in dividend payout ratios that have taken place during the last decade are perfectly understandable.
a. the reduction in dividend payout ratios that have taken place during the last decade are
b. the reduction in dividend payout ratios that has taken place during the last decade is
c. the reduction that has taken place in dividend payout ratios during the last decades are
d. the reduction in dividend payout ratios that have taken place during the last decade is
e. the reduction that has taken place in dividend payout ratios during the last decades is


Basically there are two errors in this sentence.
First is Subject Verb Agreement
Since The subject "Reduction" of independent clause is singular, a singular verb "IS" should be used. So we can eliminate option A & C
Second is Restrictive Clause
THAT is used to modify immediately preceding noun and such modification should be logically correct.
Options B & D both are incorrect since the placement of THAT after RATIOS doesn't make any logical sense. Such placement means that "Ratios have take place during the last decades", an incorrect meaning.

Hence Answer is option E
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Re: Because most investors prefer long term capital gains [#permalink]

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New post 09 Jul 2017, 04:10
Since "that has" clearly can't refer to ratios in B, why would it change the meaning and be wrong?

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Because most investors prefer long term capital gains [#permalink]

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New post 09 Jul 2017, 05:40
Imo E
The meaning of the original sentence is that the reduction that has taken place in dividend payout ratio is perfectly understandable because most investors prefer long term capital gains to annual dividend payouts.

Subject here is the reduction and it is singular so we need singular very only option E is right .

B has a problem that is B refers to ratio that has taken place .
It does not make sense the reduction in ratio took place not the ratio .

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Re: Because most investors prefer long term capital gains [#permalink]

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New post 01 Sep 2017, 05:51
Turkish wrote:
Because most investors prefer long term capital gains to annual dividend payouts, the reduction in dividend payout ratios that have taken place during the last decade are perfectly understandable.

a. the reduction in dividend payout ratios that have taken place during the last decade are
b. the reduction in dividend payout ratios that has taken place during the last decade is
c. the reduction that has taken place in dividend payout ratios during the last decades are
d. the reduction in dividend payout ratios that have taken place during the last decade is
e. the reduction that has taken place in dividend payout ratios during the last decades is



Only contenders are B and E .
The difference between them lies in the placement of the phrases" that has taken place " and " in dividend payout ratios"

In B and E the phrases places have been interchanged.

Ideally the phrase should be placed very close to whatever it modifies.
In this case B can be argued to be correct also as " in dividend payout ratios" is rightly placed just after " the reduction " so we get:
the reduction in dividend payout ratios .......

also " that has taken place during the last decade " is better than " in dividend payout ratios during the last decade "

Feel as though B should be a better choice, as all modifiers are placed next to whatever they modify.
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Re: Because most investors prefer long term capital gains [#permalink]

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New post 01 Sep 2017, 09:01
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there is a typo in option E..it says "decades", which is why I eliminated it. Please ensure you do not make such mistakes while posting questions! You are giving the GMAT!

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Because most investors prefer long term capital gains [#permalink]

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New post 02 Sep 2017, 13:58
Turkish wrote:
Because most investors prefer long term capital gains to annual dividend payouts, the reduction in dividend payout ratios that have taken place during the last decade are perfectly understandable.

a. the reduction in dividend payout ratios that have taken place during the last decade are
b. the reduction in dividend payout ratios that has taken place during the last decade is
c. the reduction that has taken place in dividend payout ratios during the last decades are
d. the reduction in dividend payout ratios that have taken place during the last decade is
e. the reduction that has taken place in dividend payout ratios during the last decades is



B/E
In B ratios that has taken place during the last decade is non sensical,
In E reduction that has taken place in dividend payout during the last decade - makes sense..
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Because most investors prefer long term capital gains   [#permalink] 02 Sep 2017, 13:58
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