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# In an atmosphere of increasing scrutiny of securities trading, a

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Re: In an atmosphere of increasing scrutiny of securities trading, a [#permalink]
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TheNightKing wrote:

Can you post the available explanation for Question 4? 6% people have got it right from 48 attempts. Very interesting.

I understand why B makes sense but it is a bit too vague to be OA. Please update

Unfortunately i don't have OE of this passage, i am also not agree with the OA, i was between C & D and finally picked up D. Will wait if blowice27 can post the OE.

Thanks
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Re: In an atmosphere of increasing scrutiny of securities trading, a [#permalink]
Quote:

Unfortunately i don't have OE of this passage, i am also not agree with the OA, i was between C & D and finally picked up D. Will wait if blowice27 can post the OE.

Thanks

That makes sense!

And as long as we agree on it then that's fine I believe. Thanks
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Re: In an atmosphere of increasing scrutiny of securities trading, a [#permalink]
Option D in Question 2 states that "The most important feature of stock is the right to receive dividends contingent upon an apportionment of profits.

However passage states "The most common feature of stock is the right to receive dividends contingent upon an apportionment of profits."
certainly both do not carry same meaning
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Re: In an atmosphere of increasing scrutiny of securities trading, a [#permalink]
globaldesi wrote:
Option D in Question 2 states that "The most important feature of stock is the right to receive dividends contingent upon an apportionment of profits.

However passage states "The most common feature of stock is the right to receive dividends contingent upon an apportionment of profits."
certainly both do not carry same meaning

The most common feature means that at least this feature must exist, a common feature could be (or should be) the most important feature without which the definition of something is incomplete. So these are indeed in the same sphere.

Best regards
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Can anyone explain the answers of question 1 and 4 in detail.
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Re: In an atmosphere of increasing scrutiny of securities trading, a [#permalink]
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A tough passage.
I don't agree to the Answer to Question 2 as the most common does not mean that most important.
I feel that this passage is too vague!
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Re: In an atmosphere of increasing scrutiny of securities trading, a [#permalink]
Hey MartyTargetTestPrep,
There seems to be a lot of confusion regarding the answers of Questions 2 and 4. Your take on these questions and why D shouldn't be the answer of question 2 will be helpful.
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Re: In an atmosphere of increasing scrutiny of securities trading, a [#permalink]
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Hey everyone - I have included official answers and explanations for questions 2 and 4 of the passage below. For question 2, A is the correct answer, not D. IMHO, answer A's inclusion of "sufficient" makes it hard to choose as one of the claims of the passage is that the definitions may not include some more complex modern securities (last paragraph). For question 4, I think the best approach to get the answer is POE, but certainly agree that the answer is far too broad. Just my two cents, hope this helps.

Question 2:
The phrase passage most closely supports indicates that this is a retrieval question. The subject of the question is the ideas in the passage. In order to answer the question, determine what the passage states about the subject and evaluate the answer choices, eliminating any choice which cannot be supported by the text.
Choice A: Correct. The Acts can adapt to modern situations because these definitions were left intentionally broad by Congress to keep the Acts from becoming outdated as investment instruments evolved.
Choice B: No. The recycled language negotiability, the ability to be pledged or hypothecated, voting rights conferred in proportion to the number of shares owned, and ability to appreciate in value may make the choice tempting, but it’s a memory trap. The passage states that If an instrument is called stock and has the above listed characteristics, then it will be considered a security without any further investigation into the surrounding circumstances. So the instrument must have those characteristics AND be called stock. The choice doesn’t claim that the instrument is called stock.
Choice C: No. The phrase fair and thoughtful is an emotional appeal. The author makes no such judgement.
Choice D: No. The recycled language feature of stock is the right to receive dividends contingent upon an apportionment of profits may make the choice appealing. However, the passage states that it’s the most common feature, not the most important feature.
Choice E: No. This answer choice uses the phrase more sophisticated to compare modern instruments to those in contemplation during the drafting of the Acts. However, this is a no such comparison answer, as the passage does not compare these two items.

Question 4:
Choice A: No. The inclusion of the phrase investors should seek professional advice is an emotional appeal. The passage only says that these definitions were left intentionally broad by Congress and that the Court expressly left for another day the question whether notes or bonds or some other category of instrument might be shown by “proving only the document itself.” It may seem like a good idea to get advice about investment instruments, yet the passage does not claim that unsophisticated traders or investors should seek professional advice.
Choice B: Correct. According to the passage, The Acts each offer a slightly different definition of security, but these definitions were left intentionally broad by Congress to keep the Acts from becoming outdated as investment instruments evolved. In addition, the Court has adopted its own method for examining the "economic reality" of a particular stock and defines it as a security only if it really has the traditional characteristics of stock. Both the Congress (the Legislative Branch) and the Supreme Court (the Judicial Branch) are involved.
Choice C: No. The claim that the Supreme Court has not ruled is a memory trap. While the passage states that the Court expressly left for another day the question whether notes or bonds or some other category of instrument might be shown by “proving only the document itself,” it is possible that the Court has since made a ruling.
Choice D: No. The claim that stock can generally be considered to be a security is a memory trap. The passage does state that If an instrument is called stock and has the above listed characteristics, then it will be considered a security without any further investigation into the surrounding circumstances. However, note that the designation of stock is not sufficient. It must also have the above listed characteristics, which were negotiability, ability to be pledged or hypothecated, voting rights conferred in proportion to the number of shares owned, and ability to appreciate in value.
Choice E: No. The phrase over-interpretation is extreme language. The passage mentions that these definitions were left intentionally broad by Congress. To claim that the interpretation would otherwise be a straight forward is a reversal.
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Re: In an atmosphere of increasing scrutiny of securities trading, a [#permalink]
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Re: In an atmosphere of increasing scrutiny of securities trading, a [#permalink]

AKukreja wrote:

­Here is the Official explanation of question #2, the Official answer is A, not D.

Official Explanation

2. The passage most closely supports which of the following statements?

Explanation

The phrase passage most closely supports indicates that this is a retrieval question. The subject of the question is the ideas in the passage. In order to answer the question, determine what the passage states about the subject and evaluate the answer choices, eliminating any choice which cannot be supported by the text.

Choice A: Correct. The Acts can adapt to modern situations because these definitions were left intentionally broad by Congress to keep the Acts from becoming outdated as investment instruments evolved.

Choice B: No. The recycled language negotiability, the ability to be pledged or hypothecated, voting rights conferred in proportion to the number of shares owned, and ability to appreciate in value may make the choice tempting, but it’s a memory trap. The passage states that If an instrument is called stock and has the above listed characteristics, then it will be considered a security without any further investigation into the surrounding circumstances. So the instrument must have those characteristics AND be called stock. The choice doesn’t claim that the instrument is called stock.

Choice C: No. The phrase fair and thoughtful is an emotional appeal. The author makes no such judgement.

Choice D: No. The recycled language feature of stock is the right to receive dividends contingent upon an apportionment of profits may make the choice appealing. However, the passage states that it’s the most common feature, not the most important feature.

Choice E: No. This answer choice uses the phrase more sophisticated to compare modern instruments to those in contemplation during the drafting of the Acts. However, this is a no such comparison answer, as the passage does not compare these two items.