Investors should not rely on the predictions of stockbrokers who publi : Critical Reasoning (CR)

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Sushil117

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Re: Investors should not rely on the predictions of stockbrokers who publi [#permalink]

21 May 2020, 12:18

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Investors should not rely on the predictions of stockbrokers who publicly predict trends in the stock market. If these stockbrokers were really able to predict these trends accurately and wished to profit as much as possible from their own predictions, they would keep this information to themselves.

Which of the following, if true, most strongly supports the argument above?

A. The greater the accuracy of a stockbroker's past predictions about stock-market trends, the more likely it is that investors will believe the stockbroker's future predictions.
-incorrect

B. Some investors who pay stockbrokers for confidential information about trends in the stock market nevertheless decide to follow their own predictions about these trends
= incorrect as can't be inferred from the passage

C. Most stockbrokers have high enough salaries to live comfortably and thus do not care about getting rich by capitalizing on stock-market trends.
-irelevant

D. The fewer investors who have access to accurate stock market predictions, the more money those who have access to such predictions can make.
-correct as it supports the argument .if everyone knows the future,no profit can be made

E. Because the stock market is unstable, investors unfamiliar with stock-market trading practices have great difficulty predicting trends in the stock market.
-incorrect

B

D4498

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Re: Investors should not rely on the predictions of stockbrokers who publi [#permalink]

21 May 2020, 12:56

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Why not A as the answer?
I am confused between A and D.How did one reached to it?
Posted from my mobile device

B

AbhishekDhanraJ72

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Investors should not rely on the predictions of stockbrokers who publi [#permalink]

04 Jun 2020, 05:51

isnt question asking to support something similar to not believe stockbrocker since they would not revel correct prediction publicly if it were true ?

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Re: Investors should not rely on the predictions of stockbrokers who publi [#permalink]

05 Jun 2020, 09:45

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D4498 wrote:

Why not A as the answer?
I am confused between A and D.How did one reached to it?
Posted from my mobile device

as per D broker will make extra money as he have access to special information and hence rather then announcing publicly he will give such important information to those who pay him extra money. NOT IN PUBLICLY

B

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Re: Investors should not rely on the predictions of stockbrokers who publi [#permalink]

28 Jun 2020, 05:34

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Investors should not rely on the predictions of stockbrokers who publicly predict trends in the stock market. If these stockbrokers were really able to predict these trends accurately and wished to profit as much as possible from their own predictions, they would keep this information to themselves.

Which of the following, if true, most strongly supports the argument above?

If Stock brokers can predict the stocks with such accuracy, then they should keep the predictions to themselves, and make the money.
My Reasoning: As the Stock brokers cannot be held accountable for their predictions, so they display their predictions publicly, irrespective of their accuracy.

From that POV, I went for option C 'Most stockbrokers have high enough salaries to live comfortably and thus do not care about getting rich by capitalizing on stock-market trends.'
because Investors are already rich enough, and do not care for additional money.

I am not able to understand what option D is conveying, it doesn't seem to be clearly worded.
D. The fewer investors who have access to accurate stock market predictions, the more money those who have access to such predictions can make.

B

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Investors should not rely on the predictions of stockbrokers who publi [#permalink]

Updated on: 15 Jul 2020, 00:06

GMATNinja wrote:

AbhishekDhanraJ72 wrote:

isnt question asking to support something similar to not believe stockbrocker since they would not revel correct prediction publicly if it were true ?

You've got to be very careful not to change the meaning of the passage when you summarize it. Since this passage is so short, it is difficult to shorten it much further.

The question asks us to find the answer choice that most supports the argument -- to do this, we need to know what the argument says exactly as it's written.

This conclusion of the passage is that investors should not rely on the predictions of stockbrokers who try to predict the market.

The support given for this conclusion is the suggestion that if the stockbrokers could make their predictions accurately, and if they wanted to maximize their profits, they would not reveal these predictions.

Let's take a look at (D) to see how it supports this argument:

Quote:

D. The fewer investors who have access to accurate stock market predictions, the more money those who have access to such predictions can make.

The passage tells us that stockbrokers would not reveal their predictions if they wanted to maximize their profits. (D) gives us some evidence to support this point -- if the stockbrokers keep their accurate predictions private, they can make more money from them.

This suggests that if the stockbrokers are making their predictions public, we cannot be certain of the accuracy of their predictions or they are not trying to maximize their profits. In either case, an investor should not rely on these predictions.

(D) provides a CONNECTION between the given evidence and the conclusion, which supports the argument as a whole. (D) is the answer to this question.

I hope that helps!

Thank you for the explanation, could you please let me know why is option C incorrect.

Investors should not rely on the predictions of stockbrokers who publicly predict trends in the stock market. If these stockbrokers were really able to predict these trends accurately and wished to profit as much as possible from their own predictions, they would keep this information to themselves.

Which of the following, if true, most strongly supports the argument above?

According to my understanding
If Stock brokers can predict the stocks with such accuracy, then they should keep the predictions to themselves, and make the money.
My Reasoning: As the Stock brokers cannot be held accountable for their predictions, so they display their predictions publicly, irrespective of their accuracy.

From that POV, I went for option C 'Most stockbrokers have high enough salaries to live comfortably and thus do not care about getting rich by capitalizing on stock-market trends.'
because Investors are already rich enough, and do not care for additional money.

I am not able to understand what option D is conveying, it doesn't seem to be clearly worded.
D. The fewer investors who have access to accurate stock market predictions, the more money those who have access to such predictions can make.

GMATNinja could you please help me with my query

Originally posted by DivyanshuGupta61 on 05 Jul 2020, 23:20.
Last edited by DivyanshuGupta61 on 15 Jul 2020, 00:06, edited 1 time in total.

B

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Re: Investors should not rely on the predictions of stockbrokers who publi [#permalink]

14 Jul 2020, 19:51

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B is saying that even if investors listen to stockbrokers, investors do what they feel is correct and best for them.
They follow their own prediction irrespective.
So, B doesn't support the argument

D.
We need to support the argument
Thus, support the conclusion or the evidence first.

D is strengthening the evidence that predicting stocks can actually be profitable to the person who is able to predict accurately.

So D is correctly pointing towards stockbrokers predictability and the money they could easily make with such a prediction.

Therefore, D is our answer

Posted from my mobile device

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Re: Investors should not rely on the predictions of stockbrokers who publi [#permalink]

16 Jul 2020, 06:30

Bunuel wrote:

Investors should not rely on the predictions of stockbrokers who publicly predict trends in the stock market. If these stockbrokers were really able to predict these trends accurately and wished to profit as much as possible from their own predictions, they would keep this information to themselves.

Which of the following, if true, most strongly supports the argument above?

A. The greater the accuracy of a stockbroker's past predictions about stock-market trends, the more likely it is that investors will believe the stockbroker's future predictions.

B. Some investors who pay stockbrokers for confidential information about trends in the stock market nevertheless decide to follow their own predictions about these trends

C. Most stockbrokers have high enough salaries to live comfortably and thus do not care about getting rich by capitalizing on stock-market trends.

D. The fewer investors who have access to accurate stock market predictions, the more money those who have access to such predictions can make.

E. Because the stock market is unstable, investors unfamiliar with stock-market trading practices have great difficulty predicting trends in the stock market.

CR16815

Conclusion - Investors should not rely on the predictions of the stockbrokers who publicly predict trends in the market.
Premise - If stockbrokers predict accurately and they wish to profit from the information so they will keep the info to themselves.
Assumption - So,If people are publicly predicting trends, it means that either they are disseminating wrong info or they dont know anything about predicting.

Scenario - where either of the assumption comes true. It shows that people are spreading wrong information or prediction is wrong.
D fits in the scenario where it says that the accurate stock predictions are not being told here. Public information is misleading and only few get to know accurate stock market predictions.

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Re: Investors should not rely on the predictions of stockbrokers who publi [#permalink]

04 Aug 2020, 07:13

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DivyanshuGupta61 wrote:

Thank you for the explanation, could you please let me know why is option C incorrect.

Investors should not rely on the predictions of stockbrokers who publicly predict trends in the stock market. If these stockbrokers were really able to predict these trends accurately and wished to profit as much as possible from their own predictions, they would keep this information to themselves.

Which of the following, if true, most strongly supports the argument above?

According to my understanding
If Stock brokers can predict the stocks with such accuracy, then they should keep the predictions to themselves, and make the money.
My Reasoning: As the Stock brokers cannot be held accountable for their predictions, so they display their predictions publicly, irrespective of their accuracy.

From that POV, I went for option C 'Most stockbrokers have high enough salaries to live comfortably and thus do not care about getting rich by capitalizing on stock-market trends.'
because Investors are already rich enough, and do not care for additional money.

I am not able to understand what option D is conveying, it doesn't seem to be clearly worded.
D. The fewer investors who have access to accurate stock market predictions, the more money those who have access to such predictions can make.

We've got a passage breakdown in this post so let's not repeat that here.

Take a look at (C):

Quote:

C. Most stockbrokers have high enough salaries to live comfortably and thus do not care about getting rich by capitalizing on stock-market trends.

First, there is no evidence that the stockbrokers cannot be held accountable for their predictions in the passage or in (C).

Second, we need to find the answer choice that strengthens the argument that investors should not rely on stockbrokers' predictions. This is because the stockbrokers would keep their predictions private if the stockbrokers could make accurate predictions and wanted to make as much money as possible.

If the stockbrokers don't care about making money, they would have less incentive to keep their accurate predictions to themselves. In this case, maybe we should rely on their predictions.

Looking at (C) like this, it weakens the argument and, therefore, we should cross it out.

(D) says:

Quote:

D. The fewer investors who have access to accurate stock market predictions, the more money those who have access to such predictions can make.

While there is a full discussion of (D) here, we can say a little more about it.

The passage is making the claim that we should not trust the predictions of the stockbrokers. The evidence given for this is if those stockbrokers were able to make accurate predictions and wanted to make as much money as possible, they would keep their predictions to themselves.

(D) is the "BECAUSE" behind the evidence. It tells us why stockbrokers would keep accurate predictions to themselves, which in turn supports the conclusion that we shouldn't rely on those predictions.

This is why (D) is the answer to this question.

I hope that helps!

S

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Re: Investors should not rely on the predictions of stockbrokers who publi [#permalink]

24 Sep 2020, 03:03

Could someone explain what's wrong with B? I am still not clear.

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Re: Investors should not rely on the predictions of stockbrokers who publi [#permalink]

24 Sep 2020, 13:11

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davidbeckham wrote:

Could someone explain what's wrong with B? I am still not clear.

The argument's conclusion is the following:

Investors should not rely on the predictions of stockbrokers who publicly predict trends in the stock market.
To correctly answer the question, we need a choice that supports that conclusion.

Here's (B).

B. Some investors who pay stockbrokers for confidential information about trends in the stock market nevertheless decide to follow their own predictions about these trends.
The fact that some investors follow their own predictions rather than predictions made by brokers does not mean that brokers predictions should not be relied upon. It means only that some people, rightly or wrongly, do not rely on them.

Furthermore, the conclusion is about stockbrokers who publicly predict trends, whereas (B) is about confidential information.

So, the information provided by (B) has no effect on the support for the argument's conclusion.

G

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Re: Investors should not rely on the predictions of stockbrokers who publi [#permalink]

28 Sep 2020, 02:20

Top Contributor

MartyTargetTestPrep, GMATNinja

I'm confused regarding the fewer.....the more structure as it seems to convey as the number of accurate predictors decrease, the profit made by people who are aware increases....

but in reality if some stock is popular as everyone is buying the price increases right..so more profit

please excuse me if I sound silly.

Im good at confusing people

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Re: Investors should not rely on the predictions of stockbrokers who publi [#permalink]

28 Sep 2020, 04:33

Expert Reply

Nevernevergiveup wrote:

MartyTargetTestPrep, GMATNinja

I'm confused regarding the fewer.....the more structure as it seems to convey as the number of accurate predictors decrease, the profit made by people who are aware increases....

but in reality if some stock is popular as everyone is buying the price increases right..so more profit

please excuse me if I sound silly.

Im good at confusing people

The statement is about having access to "predictions," in other words, advance information.

An individual would have access to a prediction BEFORE something happens.

After that something happens, the stock would become popular, or the prediction could even be the stock will become popular. Right?

Essentially a prediction is that a stock will become popular. So, if you are the only one who has it, maybe you make more money because you are the only one who buys before the stock becomes popular.

Alternatively, if a stockbroker has such a prediction, the stockbroker could make a lot of money by selling a stock to person after person before the prediction proves correct, but if everyone has the information, the stock will move before the stockbroker has a chance to do so.

B

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Re: Investors should not rely on the predictions of stockbrokers who publi [#permalink]

21 Oct 2020, 12:36

To solve this, you just need to list certain elements and consider the 'correlation/equivalence':
Stimulus: Accuruate ==> Keep to themself. Also appratently Accruate ===> Means more money (who bought the stock regardless investor/stockbroker)

Analysis:
Accuruate = Keep to themself = Less people know
Accuruate = More money
Hence:
Less people know = more money

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Re: Investors should not rely on the predictions of stockbrokers who publi [#permalink]

22 Dec 2020, 20:49

D4498 wrote:

Why not A as the answer?
I am confused between A and D.How did one reached to it?
Posted from my mobile device

For anyone who is asking why A is not the answer: read option A more carefully. Option A is a general statement in the context of the argument. It neither weakens nor strengthens the argument.

D

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Investors should not rely on the predictions of stockbrokers who publi [#permalink]

04 Feb 2021, 11:54

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Official Answer Explanation

Argument Evaluation

Situation: Investors are advised not to rely on the predictions of stockbrokers who publicly predict trends in the stock market. The basis for this advice is that if stockbrokers could accurately predict market trends and wished to maximize their profits, they would not publicly disclose their market predictions.

Reasoning: What fact or principle would provide the strongest support for the argument on which the advice is based? Suppose certain stockbrokers wish to profit as much as possible from their predictions, and suppose the predictions are highly accurate. Then these stockbrokers can make extraordinarily high gains by investing in stocks or by making the information available only to clients who pay large amounts for it. But if the predictions are publicly disclosed, then many other people who trust those predictions may invest in response to them, and this can cause stock market movements that the stockbrokers did not expect, thus upsetting the stockbrokers' investment outcomes and reducing their profits. In that case, the stockbrokers would have profited more by not having publicly disclosed their predictions. This example suggests that if highly profit-motivated stockbrokers publicly disclose their predictions, those predictions should be viewed skeptically.

A This generalization does not support the argument for the advice given. It suggests that concern about their reputations is a possible motive for stockbrokers to make accurate public predictions. Furthermore, investors who have good reason to trust a stock market prediction would do well to take account of that prediction in managing their investments.

B This fact could reflect prudence on the part of these investors who have gained access to confidential information; trading on some kinds of confidential information can be illegal, for example. But this fact neither strengthens nor weakens the support for the advice that investors should not rely on stock market predictions publicly disclosed by stockbrokers.

C This would, if anything, be a reason not to follow the advice given in the argument. If most stockbrokers do not desire to maximize their incomes and they can accurately predict stock market trends, then the recommendations of such stockbrokers could help investors who rely on them increase their incomes.

D Correct. This supports the argument for the advice given to investors: not to rely on the predictions of stockbrokers who publicly predict trends in the stock market. It is assumed that stockbrokers wish to maximize their profits, or at least greatly increase them.

E This suggests that many investors without specialized experience that would help them understand stock market dynamics would need to rely on some form of expert advice, including that given by stockbrokers. This provides no additional support for the argument suggesting that investors should not rely on stockbrokers who publicize their predictions of stock market trends—no matter how accurate such predictions have proved in the past.

The correct answer is D.

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Re: Investors should not rely on the predictions of stockbrokers who publi [#permalink]

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Re: Investors should not rely on the predictions of stockbrokers who publi [#permalink]

24 Nov 2023, 17:14

GMAT Critical Reasoning (CR) Questions

Investors should not rely on the predictions of stockbrokers who publi