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Just wondering why we can't just use parallelism to eliminate B, D, and E.
It's important to make sure an answer choice has a parallelism trigger before you consider whether the parallelism is faulty. In (E), we get "and." Because "and" must connect like forms, it's perfectly valid to decide that "struggled... and neglecting" isn't parallel, and is therefore wrong.
In (B) and (D), however, the "and" is replaced by "while," which isn't a parallelism trigger. For example, you could write:
Tim and Betty watched several old episodes of Breaking Bad while neglecting their children, who may as well have been cooking meth in an Easy Bake Oven in the kitchen.
Though you can certainly take issue with Tim and Betty's parenting here, you wouldn't want to determine that "watched... while neglecting" was a grammatical error. "While" is just an adverb, so there's no need for parallelism.
That said, you noticed the problem with the construction "that of," which we see in (B), (C), and (D). This issue is a perfectly legitimate reason to kill those options.
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and another question: although i understand A is correct - why isn't 'their' structurally incorrect since the closest plural noun is critics? I understand that the intended meaning is to describe the bank & fund, but just wanted to pick someone's brain for this one
Your litmus test when evaluating a pronoun is really just whether there's a logical antecedent somewhere in the sentence. If there is, don't treat the pronoun as a concrete error.
Also, if you read the relevant clause in (A) without modifiers, it looks like this:
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The World Bank and the International Monetary Fund have continually struggled to meet the expectations of
their major shareholders.
It's clear here that "their" refers to "The World Bank and the International Monetary Fund." No other antecedent would make sense.
Now, imagine that you didn't remove the modifier and were wondering about "critics." Hopefully, you'd immediately realize that it would be awfully strange for critics to have shareholders and so the antecedent for "their" must be somewhere else in the sentence. If it's a struggle to find this antecedent is that worth noting? Sure. But it's not fundamentally wrong, and so, for the time being, you'd hold on to the option. Because every alternative has a concrete error here, there's no reason to revisit the pronoun usage. A logical antecedent exists, and that's good enough.
The takeaway: There's no rule that a pronoun has to refer to the closest eligible noun. More generally, if you see an issue that you think is somewhat problematic, but isn't a technical grammar error and doesn't create an incoherent meaning, try not to use that issue as a decision point.
I hope that helps!