Country X's recent stock-trading scandal should not diminish investors

Solution
Understand the passage

Country X's recent stock-trading scandal should not diminish investors' confidence in the country's stock market.

The author starts with his main conclusion/makes a claim. Recently there has been a stock-trading scandal but the author believes it should not reduce the investors’ faith in the country’s stock market.

For one thing, the discovery of the scandal confirms that Country has a strong regulatory system, as the following considerations show.

The author makes another claim to provide his reasoning behind the main conclusion.
He says that if a scandal in the stock market has been brought to light, then that proves that the country’s regulatory system is strong. He goes on to elaborate his reasoning

In any stock market, some fraudulent activity is inevitable.

He presents another observation. Every stock market is bound to have some fraud or the other.

If a stock market is well regulated, any significant stock-trading fraud in it will be very likely be discovered.

But if a stock market works within a sound regulatory system, then any significant stock trading fraud will probably be discovered.

This deters potential perpetrators and facilitates improvement in regulatory processes.

And this discourages potential frauds and makes it easier to improve the regulatory processes.

Pre-thinking

Bold Face 1
Role = secondary claim /conclusion
Relationship with main conclusion = acts as the intermediate conclusion and is used to support the main conclusion

Answer Choice Analysis

A
It is the argument's only conclusion.
No. It is not the only conclusion. It acts as the premise for the main conclusion.
Thus, this is not the correct choice

B
It is the conclusion

Yes. It is a conclusion

for which the argument provides support

Yes. The rest of the argument contains observations that support this conclusion

and which itself is used to support the argument's main conclusion.

Yes. This conclusion acts as the premise to support the author’s main claim

Thus, this is the correct choice.

C
It is the argument's main conclusion

No. It is the intermediate conclusion.

and is supported by another explicitly stated conclusion

No. Rather it supports the main conclusion of the passage.

for which further support is provided.

Yes. There is support provided for the main conclusion of the passage.

Thus, this is not the correct answer.

D
It is an assumption

No. It is not an assumption

for which no explicit support is provided

No. Support is provided for this intermediate conclusion in the second half of the passage.

and is used to support the argument's only conclusion.

No. It is definitely used to support the argument’s main conclusion but that conclusion is not the only conclusion of the argument.

Thus, this is not the correct answer.
E
It is a compound statement

No. It is not a compound statement.

containing both the argument's main conclusion

No. It just contains the intermediate conclusion

and an assumption used to support that conclusion

No. It does not contain any assumption.

Thus, this is not the correct choice

i am confused with option D.why it is not an assumption.What actually is the assumption in boldface questions please clarify.

Hey Bud, Not sure if you still have this question!

An assumption is an unstated premise that the author accepts to be true.

For e.g.
Tom loves chocolates. Thus, Tom will love the new Hagen Das chocolate truffle ice-cream.

Here, the unstated premise or assumption is that Tom loves chocolate, so he will love it in all it's variations, be it a chocolate, or a chocolate flavoured ice-cream. The author accepts this as true to make the conclusion above.

Another e.g.
Manchester United dominated West Ham and won the First League game 4-0. We can effectively say that Manchester United are the team to beat this season.
What's the assumption here?

The above examples are not GMAT Level, but they can give you a fair indication of what an assumption is. An assumption is never directly stated in the argument. It is however, an unstated fact that the author presumes to be true, to draw a conclusion.

Hope this helps!
See these articles for an insight!
https://gmat.economist.com/gmat-advice/ ... -questions
https://gmatclub.com/forum/inference-vs ... l#p1177826

always try to find what author wants to convince us - main conclusion.
And the main conclusion is - Country X's recent stock-trading scandal should not diminish investors' confidence in the country's stock market

the bold face is another fact or conclusion which supports the main conclusion above.

to support this conclusion- author provides many reasoning or premises later

A good approach here is to use the "Why?" strategy for finding conclusions.

The SCANDAL should not diminish investors' confidence -> WHY ? -> Because the discovery of it (scandal) confirms a strong regulatory system.
Therefore, the boldface part serves as evidence for the first sentence

The second part is a little bit trickier because at first glance the boldface part might look like a fact, not a stance. One should pay attention to the "as the following considerations show" which is a CLUE.

The discovery confirms a strong regulatory system -> WHY ? -> Since in well-regulated systems frauds are discovered.

Premise never has anything it can direct question WHY to
Evidence always tells you WHY you should believe the conclusion

Hope that helps

GMATNinja Could you please help explain why the bold-faced statement is not an assumption (As what choice D and E state) ? Thanks for your collaboration.

An assumption would be an unsupported statement that would support the conclusion.

The boldfaced portion is a conclusion, not an assumption.

We can tell the the boldfaced portion is a conclusion, not an assumption, because it is supported by everything that comes after it.

Notice, that the passage states the boldfaced portion and then says, "as the following considerations show."

We can see, therefore, that what comes after "as the following considerations show," shows that the boldfaced portion, a conclusion, is true.

Sneaky intermediary conclusion.

Country X's recent stock-trading scandal should not diminish investors' confidence in the country's stock market. For one thing, the discovery of the scandal confirms that Country X has a strong regulatory system, as the following considerations show. In any stock market, some fraudulent activity is inevitable. If a stock market is well regulated, any significant stock-trading fraud in it will very likely be discovered. This deters potential perpetrators and facilitates improvement in regulatory processes.

In the argument, the portion in boldface plays which of the following roles?


(A) It is the argument's only conclusion.

No. The BF is a second (intermediary) conclusion.

(B) It is the conclusion for which the argument provides support and which itself is used to support the argument's main conclusion.
Correct

(C) It is argument's main conclusion and is supported by another explicitly stated conclusion for which further support is provided.

No. The main conclusion is: Country X's recent stock-trading scandal should not diminish investors' confidence in the country's stock market.

(D) It is an assumption for which no explicit support is provided and is used to support the argument's only conclusion.

No. It is a conclusion on its own.

(E) It is a compound statement containing both the argument's main conclusion and an assumption used to support that conclusion.

Hey GMATNinja,
I had a question regarding whether the statements following the boldface sentence actually support the claim made by the boldface statement. In the construction 'if A, then B', B occurring does not guarantee A occurring. So, how can we say here that the discovery of the scandal CONFIRMS that country X has a strong regulatory system?

I believe the author is using the word “confirms” in the sense that, in the author’s mind and in the author’s opinion, this supporting evidence “confirms” X. In the end though, it’s still just an author’s opinion-claim, which as we’ve seen is often full of logical holes.

In this context, it’s a claim or a conclusion that the author is making (not the Main Conclusion). By saying the facts “confirm” X, the author is likely making a logical fallacy in his opinionated argument: no different than when we look at passages involved in the Weaken/Strengthen question types.

I don’t think it’s intended (maybe in the author’s mind) that the facts 100%, categorically confirm the statement as an inference type of conclusion.



Posted from my mobile device

Yeah, I understand what you mean, fair enough. I realized that providing support to a statement doesn't necessarily mean proving that statement.
Thank you for your reply Fdambro294

Hey MartyTargetTestPrep,

Since assumptions are unstated premises, and boldface statements are present in the stimulus, can we conclude that always when we see an option a boldface question saying " .... is an assumption....", the option is certainly wrong?

We need to identify the main conclusion of the argument.

The main conclusion: Country X's recent stock-trading scandal should not diminish investors' confidence in the country's stock market.

Therefore, any sentence that states the boldface is the main conclusion is incorrect. We can eliminate A, C, and E.

Let's compare B and D:



Clearly, support is given for this statement ('as the following considerations show'). D is out.



This statement concludes Country X has a strong regulatory system AND is used to support the main conclusion, which is the prior sentence. Perfect.

B is the correct choice.

Hello experts,
have a little trouble with D,
I agree that "no explicit support is provided" part is wrong- because author presents some facts to support the intermidiate conclusion.
but can we say its an assumption?
looks ok to me - an assumption can be an opinion!
after begining with the main conclusion, author is assuming that country X has strong regilatory system (also be called as a claim) and later provides some evidence to support this assumption!

So is this an assumption or not?

I would say not. An assumption, by definition, is something that is just presumed to be true, without justification. The fact that there is justification (the 'explicit support' that is provided) makes me think this is not an assumption.

Also, on the GMAT, assumptions are almost always implicit. Boldface questions might bend this definition a little bit, but in general, an 'assumption' on the GMAT is 'something that is not stated but must be true for a conclusion to hold.'

A few questions:
-What does the "as the following considerations show" refer to in the argument? Is it the following sentences? The placement of this phrase is a bit strange in my view.

-Would Choice (D) be correct if it read as follows: "It is an assumption for which explicit support is provided and is used to support the argument's main conclusion." I am just a bit confused here on how you can make this conclusion (although not the main conclusion) given that someone could have accidently stumbled upon the fraud? This does not necessarily show that Country X has a strong regulatory system. Or perhaps I am thinking about what the GMAT defines as an assumption. Is this basically a statement that is then supported by the following sentences, so in of itself given that the statement has support... that makes it a conclusion and not an assumption?

I may be overthinking this, but this boldfaced portion of the argument seemed just like a hasty generalization.

Thank you for bearing through my questions

As you suggest, the statement that "the discovery of the scandal confirms that Country X has a strong regulatory system" is supported by the sentences that follow. More specifically, it's supported by the statement that some fraudulent activity is inevitable, and that it will be discovered in a well-regulated market. So you're correct that "the following considerations" refers to the sentences that come next.

As you also point out, the fact that the boldface statement is supported means that it's by definition a conclusion, not an assumption. It's also true that the boldface conclusion relies on certain assumptions. It assumes, as you say, that the fraud was discovered as a result of the regulations, and not simply by accident. But that doesn't make the boldface statement an assumption itself. Rather, it tells us that the conclusion (i.e. the boldface statement) relies on an assumption.

From another angle: as you point out, the author's statement that "the discovery of the scandal confirms that Country X has a strong regulatory system" isn't airtight. Maybe other instances of fraud in Country X weren't caught? We really don't know. But whether it's true or not, the boldface statement is an inference supported by evidence. So even if it isn't an airtight conclusion, and even if it relies on assumptions, it's still a conclusion.

Let's now take a look at (D):


One problem with (D) is that the boldface statement is a conclusion. Another problem is that explicit support is provided. More specifically, the author supports the boldface statement by telling us that "some fraudulent activity is inevitable," and that a well regulated market will likely discover the fraud. So (D) is incorrect.

I hope that helps!