Critical reasoning Answers and Explantions : GMAT Critical Reasoning (CR)
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# Critical reasoning Answers and Explantions

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09 Feb 2008, 00:18
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Can someone please provide me with the answers and an explanation to the following questions below. Thanks

Questions 5 and 6 refer to the following text
E-business is gradually taking over from ordinary "bricks-and-mortar" premises. The companies listed on the NASDAQ, the stock exchange index for the new technological companies, rose on average more than twice as fast as the fastest-rising stocks listed on the Dow Jones index.

5) The argument above contains which of the following assumptions?

a)The share price of e-businesses will continue to rise.
b)The Dow Jones index only lists companies which perform badly.
c)The NASDAQ never lists companies which are performing badly.
d)The Dow Jones index will continue to rise less quickly than the NASDAQ.
e)The companies listed on the NASDAQ are not also listed on the Dow Jones.

6) The argument about e-businesses would be strengthened most by which of the following?

a) A report by a financial expert stating that share prices are set to rise in the future.
b) An end-of-year statement by a company listed on the NASDAQ announcing record profits for the past year.
c) An article in the Financial Times indicating that a larger proportion of traditional (non e-business) firms have gone bankrupt than new e-businesses.
d) A novel by a company director about an e-business that succeeds spectacularly.
e) A reduction in corporation tax for new e-businesses by the Chancellor of the Exchequer.
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09 Feb 2008, 09:46
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5. e ?
6. c ?
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09 Feb 2008, 10:21
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same ... i also had E and C
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09 Feb 2008, 11:13
Thanks.
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09 Feb 2008, 12:18
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What are OAs?
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09 Feb 2008, 12:53
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Expert's post
C. in 6 is not clear for me.
Can anybody explain?
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09 Feb 2008, 13:19
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I am not sure if my thinking is correct but here's why I think it's c for 6.

The argument (conclusion) is that e-business companies are 'taking over' than bricks and mortars i.e. e-business are successful than bricks and mortars which is why they can be thought of 'taking over'.

The only answer choice (to me) that strengthens this conclusion is c, which says that that more traditional companies are failing than non traditional (e-business) companies.
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09 Feb 2008, 13:24
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Expert's post
varunk wrote:
I am not sure if my thinking is correct but here's why I think it's c for 6.

The argument (conclusion) is that e-business companies are 'taking over' than bricks and mortars i.e. e-business are successful than bricks and mortars which is why they can be thought of 'taking over'.

The only answer choice (to me) that strengthens this conclusion is c, which says that that more traditional companies are failing than non traditional (e-business) companies.

Thanks. That makes sense now.
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09 Feb 2008, 18:27
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5) The argument above contains which of the following assumptions?

a)The share price of e-businesses will continue to rise.[To extreme – eliminate it]

b)The Dow Jones index only lists companies which perform badly. [What Dow Jones list is out of scope – eliminate it

c)The NASDAQ never lists companies which are performing badly.[What NASDAQ list is out of scope – eliminate it]

d)The Dow Jones index will continue to rise less quickly than the NASDAQ.[To extreme – eliminate it]

e)The companies listed on the NASDAQ are not also listed on the Dow Jones. [Hold it]

6) The argument about e-businesses would be strengthened most by which of the following?

a) A report by a financial expert stating that share prices are set to rise in the future.[Good one – but it can strengthen complete market, not specifically e-businesses – eliminate it]

b) An end-of-year statement by a company listed on the NASDAQ announcing record profits for the past year.[This is only one company success story – eliminate it]

c) An article in the Financial Times indicating that a larger proportion of traditional (non e-business) firms have gone bankrupt than new e-businesses.[ Both businesses are compared and provided information that e-businesses are growing – hold it]

d) A novel by a company director about an e-business that succeeds spectacularly.[Definitely a success story but has no future indication that the company continue to grow – eliminate it]

e) A reduction in corporation tax for new e-businesses by the Chancellor of the Exchequer.[Corporation tax not even mentioned in the argument – eliminate it]

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