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Updated on: 09 Aug 2025, 06:54
Originally posted by Sajjad1994 on 01 Mar 2023, 21:00.
Last edited by Sajjad1994 on 09 Aug 2025, 06:54, edited 3 times in total.
Last edited by Sajjad1994 on 09 Aug 2025, 06:54, edited 3 times in total.
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Question 1
D
Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
25%
(medium)
Question Stats:
77% (02:35) correct
23%
(02:21) wrong
based on 262
sessions
History
Date
Time
Result
Not Attempted Yet
Question 2
B
Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
35%
(medium)
Question Stats:
58% (00:47) correct 42%
(00:51) wrong
based on 279
sessions
History
Date
Time
Result
Not Attempted Yet
Question 3
C
Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
55%
(hard)
Question Stats:
46% (01:01) correct 54%
(00:54) wrong
based on 273
sessions
History
Date
Time
Result
Not Attempted Yet
Question 4
E
Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
65%
(hard)
Question Stats:
50% (01:26) correct 50%
(01:44) wrong
based on 258
sessions
History
Date
Time
Result
Not Attempted Yet
Question 5
B
Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
55%
(hard)
Question Stats:
45% (00:48) correct 55%
(01:05) wrong
based on 247
sessions
History
Date
Time
Result
Not Attempted Yet
Question 6
D
Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
95%
(hard)
Question Stats:
38% (02:02) correct 62%
(02:10) wrong
based on 229
sessions
History
Date
Time
Result
Not Attempted Yet
Passage A
Insider-trading law makes it a crime to make
stock transactions, or help others make stock
transactions, based on information you have ahead
of the general public because of your special position
(5) within a company.
However, trading based on information you have
that everyone else doesn't-isn't this part of the very
definition of a functioning stock market? The entire
field of stock brokering is based on people gaining
(10) knowledge that others don't have and then using it to
profit themselves or their clients. Ifyou analyze a
stock, decide that it is overvalued, and sell it, you are
taking advantage of knowledge that many others don't
have. That doesn't make you a criminal; it means
(15) you've done your homework.
Stock markets work best when all the relevant
information about a company is spread as widely as
possible, as quickly as possible. Stock prices represent
a constantly shifting amalgamation of everyone's
(20) information about and evaluations of a company's
value. It helps when those who have accurate
information about changing circumstances are
permitted to act so that stock prices reflect them.
Someone selling a stock because they know
(25) something will happen soon that will lower the stock's
value helps spread the knowledge that the price ought
to be dropping. Such actions help ensure that stock
prices do reflect a more accurate assessment of all
the relevant facts. That's good for everyone in the
(30) stock market.
When contemplating insider-trading law, it helps
to consider a far more widespread practice: "insider
nontrading"-stock sales or purchases that would have
been made, but aren't because of inside knowledge.
(35) This is certainly happening every day, and rightfully
so. No one would think to lock someone up for it.
Passage B
One of the basic principles of the stock market
is transparency. In a transparent market, information
that influences trading decisions is available to all
(40) participants at the same time. Success in the market
can then be gained only by skill in analyzing the
information and making good investing decisions.
In a transparent stock market, everyone has the same
chance of making a good investment, and success is
(45) based on individual merit and skill.
In insider-trading situations, some people make
investment decisions based on information that other
people don't have. People who don't have access to
the inside information can't make similarly informed
(50) investment decisions. That unfairly compromises the
market: people with inside information can make
informed trade decisions far before everyone else,
making it difficult or impossible for other people to
earn money in the stock market.
(55) This, in tum, causes a loss of investor confidence
and could ultimately destroy the market. People invest
in the stock market because they believe they can
make money. The whole point of capital investments
is to make good investing decisions and make money
(60) over time. If investors believe they can't make money,
they won't invest. Undermining investor confidence
would thus deny companies access to the funds they
need to grow and be successful, and it could ultimately
lead to widespread financial repercussions.
Insider-trading law makes it a crime to make
stock transactions, or help others make stock
transactions, based on information you have ahead
of the general public because of your special position
(5) within a company.
However, trading based on information you have
that everyone else doesn't-isn't this part of the very
definition of a functioning stock market? The entire
field of stock brokering is based on people gaining
(10) knowledge that others don't have and then using it to
profit themselves or their clients. Ifyou analyze a
stock, decide that it is overvalued, and sell it, you are
taking advantage of knowledge that many others don't
have. That doesn't make you a criminal; it means
(15) you've done your homework.
Stock markets work best when all the relevant
information about a company is spread as widely as
possible, as quickly as possible. Stock prices represent
a constantly shifting amalgamation of everyone's
(20) information about and evaluations of a company's
value. It helps when those who have accurate
information about changing circumstances are
permitted to act so that stock prices reflect them.
Someone selling a stock because they know
(25) something will happen soon that will lower the stock's
value helps spread the knowledge that the price ought
to be dropping. Such actions help ensure that stock
prices do reflect a more accurate assessment of all
the relevant facts. That's good for everyone in the
(30) stock market.
When contemplating insider-trading law, it helps
to consider a far more widespread practice: "insider
nontrading"-stock sales or purchases that would have
been made, but aren't because of inside knowledge.
(35) This is certainly happening every day, and rightfully
so. No one would think to lock someone up for it.
Passage B
One of the basic principles of the stock market
is transparency. In a transparent market, information
that influences trading decisions is available to all
(40) participants at the same time. Success in the market
can then be gained only by skill in analyzing the
information and making good investing decisions.
In a transparent stock market, everyone has the same
chance of making a good investment, and success is
(45) based on individual merit and skill.
In insider-trading situations, some people make
investment decisions based on information that other
people don't have. People who don't have access to
the inside information can't make similarly informed
(50) investment decisions. That unfairly compromises the
market: people with inside information can make
informed trade decisions far before everyone else,
making it difficult or impossible for other people to
earn money in the stock market.
(55) This, in tum, causes a loss of investor confidence
and could ultimately destroy the market. People invest
in the stock market because they believe they can
make money. The whole point of capital investments
is to make good investing decisions and make money
(60) over time. If investors believe they can't make money,
they won't invest. Undermining investor confidence
would thus deny companies access to the funds they
need to grow and be successful, and it could ultimately
lead to widespread financial repercussions.
1. Both passages are primarily concerned with answering which one of the following questions?
(A) How is insider trading defined?
(B) Should there be severer penalties for insider trading?
(C) Why do investors engage in insider trading?
(D) Is insider trading harmful to the stock market?
(E) What is the best means of regulating insider trading?
(A) How is insider trading defined?
(B) Should there be severer penalties for insider trading?
(C) Why do investors engage in insider trading?
(D) Is insider trading harmful to the stock market?
(E) What is the best means of regulating insider trading?
2. In their attitudes toward stock trades based on inside information, the author of passage A and the author of passage B, respectively, may be most accurately described as
(A) positive and neutral
(B) positive and negative
(C) neutral and negative
(D) neutral and neutral
(E) negative and negative
(A) positive and neutral
(B) positive and negative
(C) neutral and negative
(D) neutral and neutral
(E) negative and negative
3. The authors would be most likely to agree that
(A) insider trading tends to undennine investor confidence in the stock market
(B) all information should be available to all market participants at the same time
(C) it is appropriate for investors to seek to gain an advantage by superior stock analysis
(D) insider nontrading should be regulated to the same extent as insider trading
(E) insider trading is the best means for disseminating information possessed by insiders
(A) insider trading tends to undennine investor confidence in the stock market
(B) all information should be available to all market participants at the same time
(C) it is appropriate for investors to seek to gain an advantage by superior stock analysis
(D) insider nontrading should be regulated to the same extent as insider trading
(E) insider trading is the best means for disseminating information possessed by insiders
4. Which one of the following laws would conform most closely to the position articulated by the author of passage A but not that articulated by the author of passage B?
(A) a law that prohibits trading based on information that is not shared by everyone
(B) a law that permits trading based on information gained from analysis of a stock but prohibits trading based on information obtained from one's position within a company
(C) a law that prohibits trading that could reasonably be expected to undermine investors' confidence in the stock market
(D) a law that legalizes selling based on inside information that a stock's price ought to be dropping but prohibits buying based on inside information that it should be rising
(E) a law that legalizes trading based on inside information, as long as that information is not acquired by theft or other unlawful means
(A) a law that prohibits trading based on information that is not shared by everyone
(B) a law that permits trading based on information gained from analysis of a stock but prohibits trading based on information obtained from one's position within a company
(C) a law that prohibits trading that could reasonably be expected to undermine investors' confidence in the stock market
(D) a law that legalizes selling based on inside information that a stock's price ought to be dropping but prohibits buying based on inside information that it should be rising
(E) a law that legalizes trading based on inside information, as long as that information is not acquired by theft or other unlawful means
5. Passage A, unlike passage B, seeks to advance its argument by
(A) applying general principles to particular examples
(B) pointing out similarities between a controversial activity and uncontroversial ones
(C) describing the consequences that would result from allowing an activity
(D) showing how a specific activity relates to a larger context
(E) examining the motivations of an activity's participants
(A) applying general principles to particular examples
(B) pointing out similarities between a controversial activity and uncontroversial ones
(C) describing the consequences that would result from allowing an activity
(D) showing how a specific activity relates to a larger context
(E) examining the motivations of an activity's participants
6. The passages' references to the analysis of information about stocks (lines 11- 14, lines 40-42) are related in which one of the following ways?
(A) Passage A presents it as unnecessary, since all relevant information is already reflected in stock prices, whereas passage B presents it as necessary for making sound investment decisions.
(B) Passage A uses it as an example of an activity that compensates for the market's lack of transparency, whereas passage B uses it as an example of an activity whose viability is conditional upon the transparency of the market.
(C) Passage A presents it as an activity that gives some investors an unfair advantage over others, whereas passage B presents it as an activity that increases the transparency of the market.
(D) Passage A presents it as comparable to the acquisition of inside information, whereas passage B contrasts it with the acquisition of inside information.
(E) Passage A treats it as an option available only to brokers and other stock-market professionals, whereas passage B treats it as an option available to ordinary investors as well.
(A) Passage A presents it as unnecessary, since all relevant information is already reflected in stock prices, whereas passage B presents it as necessary for making sound investment decisions.
(B) Passage A uses it as an example of an activity that compensates for the market's lack of transparency, whereas passage B uses it as an example of an activity whose viability is conditional upon the transparency of the market.
(C) Passage A presents it as an activity that gives some investors an unfair advantage over others, whereas passage B presents it as an activity that increases the transparency of the market.
(D) Passage A presents it as comparable to the acquisition of inside information, whereas passage B contrasts it with the acquisition of inside information.
(E) Passage A treats it as an option available only to brokers and other stock-market professionals, whereas passage B treats it as an option available to ordinary investors as well.
RC Butler 2023 - Practice Two RC Passages Everyday.
Passage # 43 Date: 02-Mar-2023
This question is a part of RC Butler 2023. Click here for Details
Passage # 43 Date: 02-Mar-2023
This question is a part of RC Butler 2023. Click here for Details
- Source: LSAT Official PrepTest 80
27 Apr 2023, 00:21
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Hi. Can you please explain the difference between option C and D in Question number 6 ?
27 Apr 2023, 03:37
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ritikmishra2901
Option (D) is correct because both passages reference the analysis of information about stocks, but they present it in different ways. Passage A presents the analysis of information as a legitimate way to make investment decisions, but contrasts it with the acquisition of inside information, which is illegal. Passage B contrasts the analysis of information with insider trading, suggesting that the former is a necessary component of a transparent stock market, while the latter undermines the market's integrity.
Option (C) is incorrect because while both passages discuss the impact of insider trading on the fairness of the stock market, they do not present the analysis of information as an activity that gives some investors an unfair advantage over others. In fact, Passage A argues that the stock market works best when accurate information is spread widely and that analyzing a stock to determine if it is overvalued is a legitimate way to make investment decisions. Passage B suggests that insider trading gives some investors an unfair advantage, but it does not make a direct connection between the analysis of information and unfairness in the market.
