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13 Dec 2018, 00:27
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C
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:
72% (01:46) correct
28%
(02:02)
wrong
based on 912
sessions
History
Date
Time
Result
Not Attempted Yet
Insider trading occurs when a company insider such as an executive or director trades in the company’s stock based on material information that has not yet been made public. Insider trading has been illegal in Country Z for several decades. The number of individuals charged with insider trading in Country Z in the last five years has tripled compared to the number of people charged in the previous five years. These statistics do not, however, show that insider trading has become more common in Country Z; rather, these statistics demonstrate the increased effectiveness on the part of the regulators responsible for enforcing these laws.
Which of the following, if true, most strengthens the argument?
A. The number of people charged with other financial crimes, such as fraud, has also increased over the past five years.
B. Fines and jail time for insider trading were both increased in Country X six years ago.
C. New software allows a single investigator to review more potentially suspicious trades by company executives per day.
D. Every four years a new person is appointed to run the agency responsible for enforcing insider trading laws in Country Z.
E. The average daily volume of stock trades in Country Z has doubled in the past five years.
Which of the following, if true, most strengthens the argument?
A. The number of people charged with other financial crimes, such as fraud, has also increased over the past five years.
B. Fines and jail time for insider trading were both increased in Country X six years ago.
C. New software allows a single investigator to review more potentially suspicious trades by company executives per day.
D. Every four years a new person is appointed to run the agency responsible for enforcing insider trading laws in Country Z.
E. The average daily volume of stock trades in Country Z has doubled in the past five years.
13 Dec 2018, 01:56
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[quote="XavierAlexander"]Insider trading occurs when a company insider such as an executive or director trades in the company’s stock based on material information that has not yet been made public. Insider trading has been illegal in Country Z for several decades. The number of individuals charged with insider trading in Country Z in the last five years has tripled compared to the number of people charged in the previous five years. These statistics do not, however, show that insider trading has become more common in Country Z; rather, these statistics demonstrate the increased effectiveness on the part of the regulators responsible for enforcing these laws.
Which of the following, if true, most strengthens the argument?
A. The number of people charged with other financial crimes, such as fraud, has also increased over the past five years.( Insider trading is the main focus)
B. Fines and jail time for insider trading were both increased in Country X six years ago.(country X is not in question)
C. New software allows a single investigator to review more potentially suspicious trades by company executives per day.( Strengthen,keep)
D. Every four years a new person is appointed to run the agency responsible for enforcing insider trading laws in Country Z.(appointment of new person every year is not going to affect the enforcement)
E. The average daily volume of stock trades in Country Z has doubled in the past five years.(what if enforcement is not done)
Will go with choice C
Thanks
Which of the following, if true, most strengthens the argument?
A. The number of people charged with other financial crimes, such as fraud, has also increased over the past five years.( Insider trading is the main focus)
B. Fines and jail time for insider trading were both increased in Country X six years ago.(country X is not in question)
C. New software allows a single investigator to review more potentially suspicious trades by company executives per day.( Strengthen,keep)
D. Every four years a new person is appointed to run the agency responsible for enforcing insider trading laws in Country Z.(appointment of new person every year is not going to affect the enforcement)
E. The average daily volume of stock trades in Country Z has doubled in the past five years.(what if enforcement is not done)
Will go with choice C
Thanks
mira93
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04 May 2020, 22:56
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Here is OE from MGMAT
(1) Identify the Question
The words strengthen and if true in the question indicate that this is a Strengthen the Argument question.
(2) Deconstruct the Argument
More people in Country Z are being charged with insider trading. This increase is not due to increased insider trading but rather due to increased effectiveness on the part of the regulators—in other words, they are better at catching people now than they were before.
Here is one possible way to map the argument.
++ People charged with IT
Not due to more IT
© More effective reg
(3) State the Goal
On a Strengthen question, the goal is to find an answer that makes the argument more likely to be valid. In this case, the answer should support the idea that the increase in people charged with insider trading is due to the fact that regulators are becoming more effective at finding people who break the law.
(4) Work From Wrong to Right
(A) No information is provided about whether the regulators responsible for enforcing insider trading regulations are also responsible for enforcing the regulations related to other financial crimes. Therefore, the number of people charged with other financial crimes is not relevant.
(B) The argument relies on statistics about the number of people charged with insider trading, not the penalties that these people receive. This answer may support the idea that Country Z is concerned with insider trading but it does not address whether the increased number of people charged is due to an increase in insider trading or an increase in the effectiveness of those charged with enforcing the laws.
(C) CORRECT. This answer provides support for the idea that regulators have become more effective. If investigators are able to review more trades, they are likely to catch more insider trading, even if the amount of insider trading did not change.
(D) No information is provided about the skill or effectiveness of the new head of the agency compared to the previous head; without more information this answer does not affect the conclusion.
(E) It is not clear how the total number of trades affects the amount of insider trading. If anything, this answer could provide an alternative explanation for the increase in charges related to insider trades. If it is assumed that insider trading is proportional to total trading, then there could be more insider trading because total trading increased.
(1) Identify the Question
The words strengthen and if true in the question indicate that this is a Strengthen the Argument question.
(2) Deconstruct the Argument
More people in Country Z are being charged with insider trading. This increase is not due to increased insider trading but rather due to increased effectiveness on the part of the regulators—in other words, they are better at catching people now than they were before.
Here is one possible way to map the argument.
++ People charged with IT
Not due to more IT
© More effective reg
(3) State the Goal
On a Strengthen question, the goal is to find an answer that makes the argument more likely to be valid. In this case, the answer should support the idea that the increase in people charged with insider trading is due to the fact that regulators are becoming more effective at finding people who break the law.
(4) Work From Wrong to Right
(A) No information is provided about whether the regulators responsible for enforcing insider trading regulations are also responsible for enforcing the regulations related to other financial crimes. Therefore, the number of people charged with other financial crimes is not relevant.
(B) The argument relies on statistics about the number of people charged with insider trading, not the penalties that these people receive. This answer may support the idea that Country Z is concerned with insider trading but it does not address whether the increased number of people charged is due to an increase in insider trading or an increase in the effectiveness of those charged with enforcing the laws.
(C) CORRECT. This answer provides support for the idea that regulators have become more effective. If investigators are able to review more trades, they are likely to catch more insider trading, even if the amount of insider trading did not change.
(D) No information is provided about the skill or effectiveness of the new head of the agency compared to the previous head; without more information this answer does not affect the conclusion.
(E) It is not clear how the total number of trades affects the amount of insider trading. If anything, this answer could provide an alternative explanation for the increase in charges related to insider trades. If it is assumed that insider trading is proportional to total trading, then there could be more insider trading because total trading increased.
