HOT Competition (Instagram) 28 Aug/04:00AM: In the “stress tests” publ

In case you’re curious, this sentence is based on a true story.

Let’s start with the “which”, since that’s a word that should always jump off the page at you on GMAT SC.

We have: “... a significant decline in a key capital ratio, which exposed a greater level of financial instability…” If you’re being TOO mechanical, you might argue that the phrase beginning with “which exposed” doesn’t logically modify the nearest noun, “a key capital ratio”.

But if you take a step back, the construction is acceptable: the phrase beginning with “which exposed” is a logical modifier for the entire noun phrase “a significant decline in a key capital ratio.” That’s not awful: you could argue that the DECLINE that exposed Goldman’s financial instability. So the “which” seems OK.

The other key here is the word “that.” It’s a singular pronoun in this context, and it clearly refers back to “level of financial instability.” That gives us the following: “...which exposed a greater level of financial instability than {the level of financial instability} of rival banks’”

This is subtle, but notice that “banks’” is possessive here. Suddenly, it makes no sense, since we basically have a double possessive. Here, have three options:

• X exposed a greater level of instability than rival banks’. -- This is OK, since the possessive suggests that we’re comparing Goldman’s level of instability to rival banks’ level of instability.
• X exposed a greater level of instability than that of rival banks. -- Also OK, since it’s clear that we’re comparing Goldman’s level of instability to the level of instability of rival banks.
• X exposed a greater level of instability than that of rival banks’. -- Not cool, because now we’re using a “that of” construction for exactly the same purpose as the possessive noun.

So (A) is gone.

If we strip the sentence down a bit, we have a construction that’s really confusing: “...Goldman Sachs experienced a decline in a key capital ratio, to expose financial instability…” It almost sounds like Goldman deliberately experienced a decline with the goal of exposing its own financial instability… or something.

I wouldn’t eliminate (B) solely because of the phrase “to expose”, but it’s definitely unclear.

The other issue is the comparison: it sounds like we’re comparing Goldman’s “level of financial instability” to the rival banks themselves. That doesn’t make any sense. So (B) is out.

I like the use of “exposing” here. Basically, “exposing a level of financial instability…” modifies the entire previous clause, and that makes perfect sense.

The comparison is solid, too. We have: “...Goldman Sachs experienced a significant decline in a key capital ratio, exposing a greater level of financial instability than [the level of financial instability of] rival banks.” Makes perfect sense, since we’re logically comparing Goldman’s level of financial instability to rival banks’ level of financial instability.

Keep (C).

(D) has exactly the same comparison error as (B): it sounds like we’re comparing Goldman’s financial instability to the rival banks themselves, and that’s nonsense.

The phrase “at a level” isn’t a DEFINITE error, but it’s not ideal, either. It’s a lot clearer to say that Goldman experienced a “greater level of financial instability” than to say that it experienced “financial instability at a level greater” than rival banks. The latter almost sounds like Goldman experienced the financial instability at the level of C-suite executives or something, but not in the company as a whole. It’s confusing.

The “and” is also weird. In (D), “experienced” and “exposed” are parallel to each other, and that’s not WRONG, but it doesn’t make a lot of sense. We’re saying that “Goldman Sachs… exposed financial stability…” -- but that didn’t actually happen. The stress tests exposed Goldman’s level of financial instability; Goldman itself didn’t expose anything.

So we have quite a few reasons to ditch (D).

The comparison is fine here, and we still have the weirdness of “at a level greater than” -- see (D) above for more on that issue.

The biggest problem with (E) is the use of “that.” The modifier beginning with “that” follows a comma, and that doesn’t make a lot of sense in this context. If we’re going to use the phrase “that exposed financial instability…” as a modifier, it would be an essential modifier for “a significant decline in a key capital ratio”, and we wouldn’t want the comma there.

I don’t generally like to eliminate answer choices based solely on commas (more on that in this video on punctuation), but this is a rare case in which the comma seems like a legit problem, and the messy use of “at a level greater than…” gives us two reasons to be suspicious of (E).

(C) doesn’t have any of those issues, so it’s our winner.