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# History has shown that severe and sudden political instability strikes

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History has shown that severe and sudden political instability strikes  [#permalink]

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Updated on: 03 Aug 2018, 03:06
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Difficulty:

75% (hard)

Question Stats:

57% (02:43) correct 43% (02:38) wrong based on 473 sessions

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History has shown that severe and sudden political instability strikes country Y roughly once every 50 years. The most recent example was the attempt on the president's life in 1992. The reaction of average investors in country Y to crisis situations in the country cannot be predicted in advance. The government's fiscal affairs department has introduced an electronic protection mechanism into the stock market of country Y in the hopes of avoiding a prolonged large-scale selloff. The mechanism is triggered in specific instances based on estimations of how average investors will react to changes in corporate data and economic indicators.

If the statements above are true, which of the following conclusions can be drawn regarding the electronic protection mechanism?

(A) Sometime within the next 50 years an attempt on the president's life will trigger the protection mechanism.

(B) Whether the protection mechanism will function appropriately in response to a sudden political event depends on whether the event is seen by investors as positive or negative.

(C) It is unclear how well the protection mechanism would work in the event of a sudden political coup if such an event is partially or wholly unrelated to changes in corporate data and economic indicators.

(D) There would be no way for the protection mechanism to differentiate between market fluctuations resulting from economic factors and those that are caused by political instability.

(E) The protection mechanism would be purposely destroyed by political insurgents if they were able to infiltrate the government's fiscal affairs department.

Originally posted by bschool83 on 14 Jul 2011, 21:02.
Last edited by Bunuel on 03 Aug 2018, 03:06, edited 1 time in total.
Renamed the topic, edited the question and added the OA.
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Re: History has shown that severe and sudden political instability strikes  [#permalink]

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14 Jul 2011, 21:44
1
bschool83 wrote:
History has shown that severe and sudden political instability strikes country X roughly once every 50 years. The most recent example was the attempt on the President's life a few years ago. The reaction of average investors in country X to crisis situations in the country cannot be predicted in advance. The government's fiscal affairs department has introduced an electronic protection mechanism into the market in the hopes of avoiding a prolonged large-scale selloff. The mechanism is triggered in specific instances based on estimations of how average investors will react to changes in corporate data and economic indicators.

If the statements above are true, which of the following conclusions can be drawn regarding the electronic protection mechanism?

a. Sometime within the next 50 years an attempt on the President's life will trigger the protection mechanism. - Goes beyond the scope

b. Whether the protection mechanism will function appropriately in response to a sudden political event depends on whether the event is seen by investors as positive or negative. - Nothing in passage suggests so.

c. It is unclear how well the protection mechanism would work in the event of a sudden political coup if such an event is partially or wholly unrelated to changes in corporate data and economic indicators. - Correct choice

d. There would be no way for the protection mechanism to differentiate between market fluctuations resulting from economic factors and those that are caused by political instability. Extremely far fetched conclusion

e. The protection mechanism would be purposely destroyed by political insurgents if they were able to infiltrate the government's fiscal affairs department. - Irrelevant, nothing in passage suggests this.

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Re: History has shown that severe and sudden political instability strikes  [#permalink]

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15 Jul 2011, 06:26
Based on the stimulus, there are three main references here: political instability, protection mechanism, and corporate data and economic indicators.

C best summarizes the facts above.

Also watch out for the tone, for e.g., D is too extreme to be an answer.'

OA is C
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Re: History has shown that severe and sudden political instability strikes  [#permalink]

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21 Sep 2011, 02:00
IMO C
Based on the evidence provided in the argument 'how well' protection mechanism will work if unrelated events occurs is unclear
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Re: History has shown that severe and sudden political instability strikes  [#permalink]

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24 Sep 2011, 21:40
**
bschool83 wrote:
History has shown that severe and sudden political instability strikes country Y roughly once every 50 years. The most recent example was the attempt on the president's life in 1992. The reaction of average investors in country Y to crisis situations in the country cannot be predicted in advance. The government's fiscal affairs department has introduced an electronic protection mechanism into the stock market of country Y in the hopes of avoiding a prolonged large-scale selloff. The mechanism is triggered in specific instances based on estimations of how average investors will react to changes in corporate data and economic indicators.

If the statements above are true, which of the following conclusions can be drawn regarding the electronic protection mechanism?

(A) Sometime within the next 50 years an attempt on the president's life will trigger the protection mechanism.
(B) Whether the protection mechanism will function appropriately in response to a sudden political event depends on whether the event is seen by investors as positive or negative.
(C) It is unclear how well the protection mechanism would work in the event of a sudden political coup if such an event is partially or wholly unrelated to changes in corporate data and economic indicators.
(D) There would be no way for the protection mechanism to differentiate between market fluctuations resulting from economic factors and those that are caused by political instability.
(E) The protection mechanism would be purposely destroyed by political insurgents if they were able to infiltrate the government's fiscal affairs department.

The president of country Y is sure having a hard time of it, being shot at and all. No matter. The real issue here is this electronic market regulation gizmo that's supposed to help the country avoid a major economic disaster. Our job is to draw a conclusion about it.

There's a lot going on here, so let's recap: Roughly every 50 years, country Y experiences political instability. The reaction of average investors to such crises cannot be predicted, so a crisis leads to, or causes, uncertainty. Country Y has created an electronic protection mechanism for its financial market that relies on estimates of how average investors will react to changes in corporate data and economic indicators. The purpose of the mechanism is to avoid a major market selloff. The correct answer will draw an inference that logically connects the different ideas stated in the evidence. It's difficult to prephrase the correct answer here, so your best bet is to test the choices rigorously, looking for the one that absolutely must be true.

(A) goes too far in its inference that an attempt on the president's life will happen within 50 years. The 1992 attempt was only an example of the political instability that occurs roughly every 50 years, and the 50-year period was an average, not an absolute limit. Furthermore, even if there is an attempt on the president's life, it is unclear how investors will react because their behavior in such situations cannot be predicted in advance. For all we know, the market will go up and the mechanism will not be needed.

(B) goes beyond the scope of the argument. Whether investors perceive sudden political events positively or negatively isn't mentioned in the stimulus, so we can't infer that that perception makes any difference to the accuracy of the mechanism.

(C) draws a reasonable conclusion based on the evidence. If political instability involves changes in corporate data and economic indicators, then the mechanism should work the way it is designed to work. But if the incident does not involve those elements, then the way the mechanism will work becomes unclear, because the behavior of investors will be unpredictable. (C) wins.

(D) This statement goes too far to be inferable. The mechanism might be able to differentiate
between various types of market fluctuations, even though it might not be able to trigger
appropriate responses to some of them.

(E) takes the argument far beyond its original scope. Nothing in the stimulus leads to a prediction
of what might happen to the protection mechanism in the event of political instability.

Our subject: electronic protection mechanism
Premise/Basis: hard to predict investors' reactions to crisis situations in Ctry Y --> risk of prolonged large-scale sell-off --> put in place the electronic protection mechanism
Assumption: electronic protection mechanism may help prevent prolonged large-scale sell-off (BUT... mechanism is helpful only when average investors' reactions are caused by changes in corporate data and economic indicators.)

What happens when reactions are not in relation to changes in corporate data and economic indicators?? UNCLEAR!!

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Re: History has shown that severe and sudden political instability strikes  [#permalink]

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01 Jan 2017, 01:26
Hi Why is D wrong?

As per the stimulus, it's mentioned that the algo works if changes in the economic indicators and corporate data are fed into it, then D talks about the reasons of these changes. There will actually be no way to determine what caused the above changes. So D seems inferable from this logic.
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Re: History has shown that severe and sudden political instability strikes  [#permalink]

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01 Jan 2017, 02:19
1
bschool83 wrote:
History has shown that severe and sudden political instability strikes country Y roughly once every 50 years. The most recent example was the attempt on the president's life in 1992. The reaction of average investors in country Y to crisis situations in the country cannot be predicted in advance. The government's fiscal affairs department has introduced an electronic protection mechanism into the stock market of country Y in the hopes of avoiding a prolonged large-scale selloff. The mechanism is triggered in specific instances based on estimations of how average investors will react to changes in corporate data and economic indicators.

If the statements above are true, which of the following conclusions can be drawn regarding the electronic protection mechanism?

(A) Sometime within the next 50 years an attempt on the president's life will trigger the protection mechanism.
(B) Whether the protection mechanism will function appropriately in response to a sudden political event depends on whether the event is seen by investors as positive or negative.
(C) It is unclear how well the protection mechanism would work in the event of a sudden political coup if such an event is partially or wholly unrelated to changes in corporate data and economic indicators.
(D) There would be no way for the protection mechanism to differentiate between market fluctuations resulting from economic factors and those that are caused by political instability.
(E) The protection mechanism would be purposely destroyed by political insurgents if they were able to infiltrate the government's fiscal affairs department.

This is an inference question... there are there things I keep in mind for wrong answers 1) answers should not be extreme 2) answers should be based on evidence provided within the text 3) answers should be drawn from premises.

A) no information regarding future assassination attempts was present within the stimulus - clearly the (2) case
B) 'seen by investors' this is a tricky choice and is in line with (2) and (3)... the stimulus talks about reactions not perceptions.
D) this answer clearly goes in line with (1) and (3) because we can't claim there is ABSOLUTELY no way
E) this answer clearly goes in line with (1) would be destroyed? how can we tell? and (2) the stimulus does not mention anything regarding infiltration

C) is the correct answer. Since the mechanism depends on corporate and economic indicators, if an event is unrelated to those indicators we can't truly say what the market reactions would be, thus, we can't truly say what the mechanism would do.
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Re: History has shown that severe and sudden political instability strikes  [#permalink]

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01 Jan 2017, 11:53
1
aman.tomar wrote:
Hi Why is D wrong?

As per the stimulus, it's mentioned that the algo works if changes in the economic indicators and corporate data are fed into it, then D talks about the reasons of these changes. There will actually be no way to determine what caused the above changes. So D seems inferable from this logic.

There is nothing in the passage that suggests that the system is incapable (or capable) of differentiating between market fluctuation resulting from economic factors and those that are caused by political instability. If you mention which sentence in the passage you think leads to this conclusion, then we may discuss further on the same.
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Re: History has shown that severe and sudden political instability strikes  [#permalink]

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03 Aug 2018, 03:08
bschool83 wrote:
History has shown that severe and sudden political instability strikes country Y roughly once every 50 years. The most recent example was the attempt on the president's life in 1992. The reaction of average investors in country Y to crisis situations in the country cannot be predicted in advance. The government's fiscal affairs department has introduced an electronic protection mechanism into the stock market of country Y in the hopes of avoiding a prolonged large-scale selloff. The mechanism is triggered in specific instances based on estimations of how average investors will react to changes in corporate data and economic indicators.

If the statements above are true, which of the following conclusions can be drawn regarding the electronic protection mechanism?

(A) Sometime within the next 50 years an attempt on the president's life will trigger the protection mechanism.

(B) Whether the protection mechanism will function appropriately in response to a sudden political event depends on whether the event is seen by investors as positive or negative.

(C) It is unclear how well the protection mechanism would work in the event of a sudden political coup if such an event is partially or wholly unrelated to changes in corporate data and economic indicators.

(D) There would be no way for the protection mechanism to differentiate between market fluctuations resulting from economic factors and those that are caused by political instability.

(E) The protection mechanism would be purposely destroyed by political insurgents if they were able to infiltrate the government's fiscal affairs department.

KAPLAN OFFICIAL EXPLANATION:

The president of country Y is sure having a hard time of it, being shot at and all. No matter. The real issue here is this electronic market regulation gizmo that's supposed to help the country avoid a major economic disaster. Our job is to draw a conclusion about it.

There's a lot going on here, so let's recap: Roughly every 50 years, country Y experiences political instability. The reaction of average investors to such crises cannot be predicted, so a crisis leads to, or causes, uncertainty. Country Y has created an electronic protection mechanism for its financial market that relies on estimates of how average investors will react to changes in corporate data and economic indicators. The purpose of the mechanism is to avoid a major market selloff. The correct answer will draw an inference that logically connects the different ideas stated in the evidence. It's difficult to prephrase the correct answer here, so your best bet is to test the choices rigorously, looking for the one that absolutely must be true.

(A) goes too far in its inference that an attempt on the president's life will happen within 50 years. The 1992 attempt was only an example of the political instability that occurs roughly every 50 years, and the 50-year period was an average, not an absolute limit. Furthermore, even if there is an attempt on the president's life, it is unclear how investors will react because their behavior in such situations cannot be predicted in advance. For all we know, the market will go up and the mechanism will not be needed.

(B) goes beyond the scope of the argument. Whether investors perceive sudden political events positively or negatively isn't mentioned in the stimulus, so we can't infer that that perception makes any difference to the accuracy of the mechanism.

(C) draws a reasonable conclusion based on the evidence. If political instability involves changes in corporate data and economic indicators, then the mechanism should work the way it is designed to work. But if the incident does not involve those elements, then the way the mechanism will work becomes unclear, because the behavior of investors will be unpredictable. (C) wins.

(D) This statement goes too far to be inferable. The mechanism might be able to differentiate between various types of market fluctuations, even though it might not be able to trigger appropriate responses to some of them.

(E) takes the argument far beyond its original scope. Nothing in the stimulus leads to a prediction of what might happen to the protection mechanism in the event of political instability.
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Re: History has shown that severe and sudden political instability strikes  [#permalink]

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08 Aug 2018, 04:45
bschool83 wrote:
History has shown that severe and sudden political instability strikes country Y roughly once every 50 years. The most recent example was the attempt on the president's life in 1992. The reaction of average investors in country Y to crisis situations in the country cannot be predicted in advance. The government's fiscal affairs department has introduced an electronic protection mechanism into the stock market of country Y in the hopes of avoiding a prolonged large-scale selloff. The mechanism is triggered in specific instances based on estimations of how average investors will react to changes in corporate data and economic indicators.

If the statements above are true, which of the following conclusions can be drawn regarding the electronic protection mechanism?

(A) Sometime within the next 50 years an attempt on the president's life will trigger the protection mechanism.

(B) Whether the protection mechanism will function appropriately in response to a sudden political event depends on whether the event is seen by investors as positive or negative.

(C) It is unclear how well the protection mechanism would work in the event of a sudden political coup if such an event is partially or wholly unrelated to changes in corporate data and economic indicators.

(D) There would be no way for the protection mechanism to differentiate between market fluctuations resulting from economic factors and those that are caused by political instability.

(E) The protection mechanism would be purposely destroyed by political insurgents if they were able to infiltrate the government's fiscal affairs department.
.

Premise: hard to predict investors' reactions to crisis situations in country Y leads to risk of prolonged large-scale sell-off
Introduced the electronic protection mechanism to avoid prolonged large-scale sell-off.

From the above we can that there is possibility that the protection mechanism may not work according to expectation.

We need to find such conclusion.

Possible Conclusion- should state that protection mechanism may not work if event is unrelated to economic factors.

Choice C - captures this view. Hence is correct Choice.
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Re: History has shown that severe and sudden political instability strikes   [#permalink] 08 Aug 2018, 04:45
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