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The part in each choice about deriving ("from which derive," etc.) is a modifier. So what is it modifying? What were the Indian alphabets derived from? They were derived from the Aramaic script. Our modifier therefore needs to touch this noun. Therefore, we can eliminate A & B, which put "it" (the empire) next to the modifier.
Now, we can eliminate D as soon as we see "from which derives both." Two things=plural=derive
E uses "and," which adds a parallel clause. Now we are saying "The empire reached the I. Valley in the 5th century, bringing the script and deriving from it the alphabets." This meaning is all wrong! According to E, the Achaemenid empire was responsible for deriving the Indian alphabets from the Aramaic script. This is an entirely different meaning from the other four choices, which do not specify *who* derived the script. The derivation is described in the passive voice, and this is appropriate since we are describing a historical development, rather than something a particular person or group did. This is a great example of how meaning can make a big difference in SC.
Dmitry Farber | Manhattan GMAT Instructor | New York