Corporate officers and directors commonly buy and sell, for : GMAT Critical Reasoning (CR)
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# Corporate officers and directors commonly buy and sell, for

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Manager
Joined: 15 May 2006
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Corporate officers and directors commonly buy and sell, for [#permalink]

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25 Jun 2006, 06:14
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Corporate officers and directors commonly buy and sell, for their own portfolios, stock in their own corporations. Generally, when the ratio of such inside sales to inside purchases falls below 2 to 1 for a given stock, a rise in stock prices is imminent. In recent days, while the price of MEGA Corporation stock has been falling, the corporationâ€™s officers and directors have bought up to nine times as much of it as they have sold.
The facts above best support which of the following predictions?
(A) The imbalance between inside purchases and inside sales of MEGA stock will grow even further.
(B) Inside purchases of MEGA stock are about to cease abruptly.
(C) The price of MEGA stock will soon begin to go up.
(D) The price of MEGA stock will continue to drop, but less rapidly.
(E) The majority of MEGA stock will soon be owned by MEGAâ€™s own officers and directors.

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Senior Manager
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25 Jun 2006, 06:18
Not sure but will go for D.
Director
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25 Jun 2006, 06:21
Straight C
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I believe its yogurt!

Manager
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25 Jun 2006, 06:22
i got C too

want to compare the reason too
SVP
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27 Jun 2006, 00:37
Got C too,

No other option makes sense.

A - This is pure speculation we don't know whether the executives will continue to buy more stocks
B - Again pure speculation. Nothing is mentioned in the passage about sale being stopped.
D - Contradictory to what is stated in the passage
E - Speculation
Director
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10 Jul 2006, 08:15
C. can we have the OA for this please.
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10 Jul 2006, 09:21
Yup. I like C.

We can only infer C or D.

D says the opposite of whats stated in the passage.
VP
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10 Jul 2006, 09:48
Answer: (C) The price of MEGA stock will soon begin to go up.

If anyone has read about insiders dumping stock, this would seem unlikely, but hey... this is GMAT not reality!!
Manager
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10 Jul 2006, 21:48
Straight C, even if u dont understand the concept of ratios only the option C has been discussed in the argument
10 Jul 2006, 21:48
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# Corporate officers and directors commonly buy and sell, for

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