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# Exposure to the rising values in the stock market, particul

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Intern
Joined: 31 May 2013
Posts: 6
Exposure to the rising values in the stock market, particul  [#permalink]

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Updated on: 17 Aug 2013, 07:05
4
00:00

Difficulty:

65% (hard)

Question Stats:

62% (02:13) correct 38% (02:27) wrong based on 258 sessions

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Exposure to the rising values in the stock market, particularly stock in technology companies, entices many families to stop renting and start buying a house. Industry data shows that the proportion of families applying for home mortgages has increased significantly over the past ten years. Therefore, either families have invested in the stock market and experienced larger gains in value, or their desire to buy a house is greater than it was ten years ago.

Which of the following is an assumption on which the argument depends?

(A) The number of bankers employed to service home mortgages has not decreased over the past ten years.
(B) Families who buy a house are no more likely than other families to spend their money on a new car.
(C) Families who buy a house are not more likely to get a home mortgage now than they were ten years ago.
(D) Rising values in stocks have not been typical for companies outside of the technology sector.
(E) Family households investing in the stock market do not make up a larger proportion of the population now than they did ten years ago.

OA is ...tell me what is the conclusion and the premise supporting it.

Thanks All.

Originally posted by asquare4120 on 17 Aug 2013, 05:25.
Last edited by Narenn on 17 Aug 2013, 07:05, edited 1 time in total.
Topic Edited :- 1) Please use the first sentence of the question to name the topic 2) Always put the OA in the spoiler
Intern
Joined: 09 Jun 2013
Posts: 47
GMAT 1: 680 Q49 V33
GMAT 2: 690 Q49 V34
GPA: 3.86
Re: Exposure to the rising values in the stock market, particul  [#permalink]

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17 Aug 2013, 09:07
1
1

This is the assumption question. The premise is, "Exposure to the rising values in the stock market, particularly stock in technology companies, entices many families to stop renting and start buying a house. Industry data shows that the proportion of families applying for home mortgages has increased significantly over the past ten years." The conclusion is, "Therefore, either families have invested in the stock market and experienced larger gains in value, or their desire to buy a house is greater than it was ten years ago." The conclusion says that there are only two possibilities to explain why the the proportion of families applying for home mortgages has increased significantly over the past ten years.

(A) The number of bankers employed to service home mortgages has not decreased over the past ten years. Try negating this answer choice. The number of bankers employed to service home mortgages HAS decreased over the past ten years. Does this weaken the argument? No! Therefore, this answer choice is incorrect. Remember that when negated, the correct answer choice always weakens the argument.
(B) Families who buy a house are no more likely than other families to spend their money on a new car. Does the argument need this assumption so that it holds true? No!
(C) Families who buy a house are not more likely to get a home mortgage now than they were ten years ago. This is the correct answer. This assumption plays a defender role by ruling out the other possible explanation besides the TWO possible explanations provided by the argument. Alternatively, when the answer choice is negated, this weakens the argument by stating there is another possible explanation which is Families who buy a house ARE more likely to get a home mortgage now than they were ten years ago
(D) Rising values in stocks have not been typical for companies outside of the technology sector.
(E) Family households investing in the stock market do not make up a larger proportion of the population now than they did ten years ago.

For answer (D) and (E), we do not need each of these as the assumption for the argument to hold true. When you are stuck between two or three choices, try to negate the answer choice. For assumption questions, try to ask yourself whether do you need this for the argument to be valid. Cheer!
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Re: Exposure to the rising values in the stock market, particul  [#permalink]

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23 Jul 2018, 06:08
Hello from the GMAT Club VerbalBot!

Thanks to another GMAT Club member, I have just discovered this valuable topic, yet it had no discussion for over a year. I am now bumping it up - doing my job. I think you may find it valuable (esp those replies with Kudos).

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Re: Exposure to the rising values in the stock market, particul   [#permalink] 23 Jul 2018, 06:08
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