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Most large corporations in the United States were once run by individu

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Re: Most large corporations in the United States were once run by individu  [#permalink]

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New post 23 Jul 2019, 20:13
Priyanka2018 wrote:
Hi,

Can someone explain q4?

Thanks in advance.

Quote:
4. The author suggests that which of the following is a true statement about people who typify the “old-style capitalist" referred to in line 23?

(A) They now rely on outdated management techniques.
(B) They seldom engaged in short-term trading of the stock they owned.
(C) They did not influence the investment policies of the corporations in which they invested.
(D) They now play a much smaller role in the stock market as a result of antitrust legislation.
(E) They were primarily concerned with maximizing the short-term profitability of the corporations in which they owned stock.

We are told that "most large corporations in the United States were once run by individual capitalists who owned enough stock to dominate the board of directors and dictate company policy." - This sentence describes capitalists in the past, and these are our "old-style capitalists". We are told that these old-style capitalists "could NOT sell out for a quick profit and instead had to concentrate on improving the long-term productivity of their companies."

The passage then describes how things work now (in contrast to the days of the old-style capitalists): "Today, with few exceptions, the stock of large United States corporations is held by large institutions... and because these institutions are prohibited by antitrust laws from {...}, they can enhance their wealth only by buying and selling stock in anticipation of fluctuations in its value."

That last part, "buying and selling stock in anticipation of fluctuations in its value", describes "short-term trading" of the stock--stock owners try to anticipate rises and falls in the stock value and buy/sell accordingly. Old-style capitalists could NOT do that... remember, they could NOT sell out for a quick profit (i.e. engage in short-term trading).

Thus, the author suggests that the old-style capitalists seldom engaged in short-term trading of the stock they owned. Because of the word "suggests" in the question, we do not need to find an answer choice that is explicitly stated in the passage or that must be true. (B) is the best answer choice, even though we can't know for sure whether it is entirely accurate.
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New post 10 Sep 2019, 10:32
Can someone explain Q2 of this passage.
I don't understand how we inferred that B to be the correct ans.
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Most large corporations in the United States were once run by individu  [#permalink]

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New post 24 Nov 2019, 07:06
Took 16 minutes to solve all the 8 questions. Got 2nd question incorrect. I understood the reasoning of my mistake from this thread.

When I solve passages related to business, I am confident to answer and able to solve within time. Major problem happens when I get science related passages. Here in GMAT CLUB, i see more science related passages too. I have few questions and I would appreciate a response from experts here.

1. Can we really get such a long list of questions on any passage in actual GMAT or will it range in 3 - 5 questions mostly?
2. When we get RC in the GMAT, how do we know that how many questions are there for this passage? Does GMAT provide some indication when we get RC? - The main reason to ask is my current strategy to give time for reading. If passage has 8 questions, I give 8 min to read so I will read slowly and then go to question. If passage has 4 questions, I will give 4 mins to read and rest 4 min to answer questions. Overall, I consider 2 min time to answer each question.
3. Does science related passages come more often in the actual GMAT?

I would appreciate response to my question. Pardon me if I have posted this to incorrect thread. I am not sure where else can I post such questions so sharing it here.

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Re: Most large corporations in the United States were once run by individu  [#permalink]

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New post 24 Nov 2019, 23:54
1
JayPatadiya wrote:
Took 16 minutes to solve all the 8 questions. Got 2nd question incorrect. I understood the reasoning of my mistake from this thread.

When I solve passages related to business, I am confident to answer and able to solve within time. Major problem happens when I get science related passages. Here in GMAT CLUB, i see more science related passages too. I have few questions and I would appreciate a response from experts here.

1. Can we really get such a long list of questions on any passage in actual GMAT or will it range in 3 - 5 questions mostly?
2. When we get RC in the GMAT, how do we know that how many questions are there for this passage? Does GMAT provide some indication when we get RC? - The main reason to ask is my current strategy to give time for reading. If passage has 8 questions, I give 8 min to read so I will read slowly and then go to question. If passage has 4 questions, I will give 4 mins to read and rest 4 min to answer questions. Overall, I consider 2 min time to answer each question.
3. Does science related passages come more often in the actual GMAT?

I would appreciate response to my question. Pardon me if I have posted this to incorrect thread. I am not sure where else can I post such questions so sharing it here.

TommyWallach, VeritasKarishma, egmat


You can expect to see 3 - 4 questions per passage. It will not be known in advance how many questions are based on that passage so allot max 3 mins for the initial reading.
You can expect to see passages from any field including science, business, sociology, history etc. Most of us are comfortable with our field of interest, but make more mistakes when the passage is from a field outside our sphere of knowledge. It is best to read up on other fields too i.e. you should invest some time in reading science articles from popular dailies, magazines etc.
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Re: Most large corporations in the United States were once run by individu  [#permalink]

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New post 29 Nov 2019, 06:22
zac123 wrote:
Can someone explain Q2 of this passage.
I don't understand how we inferred that B to be the correct ans.


Question: It can be inferred from the passage that which of the following is true of majority shareholders in a corporation?

Initially I was also confused because of the use of "present tense - is true". I inferred the question about the current shareholders.
However, in the passage it is mentioned: "because these institutions are prohibited by antitrust laws from owning a majority of a company's stock". This statement suggests that the question is not about the current shareholders, instead the question is asking about the shareholders mentioned in lines 1 -7.

Once we understand this, the question is quite straight forward:

(A) They make the corporation's operational management decisions.
- They defined the company policy - say in five years the company should have a majority stake in sales of a particular product in country X.
Operational management decisions - day to day activities.
- Wrong

(B) They are not allowed to own more than fifty percent of the corporation's stock.
- Wrong
- In fact they owned majority stake. Majority > 50%

(C) They cannot make quick profits by selling their stock in the corporation.
-Correct
-Excerpt from the passage: "Because putting such large amounts of stock on the market would only depress its value, they could not sell out for a quick profit and instead had to concentrate on improving the long-term productivity"

(D) They are more interested in profits than in productivity.
- Wrong
- Not mentioned in the passage

(E) They cannot sell any of their stock in the corporation without giving the public advance notice.
- Wrong
- This is true for the recommended course of action and not for the shareholders in consideration for this question.

Hope the explanation helps!
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Re: Most large corporations in the United States were once run by individu   [#permalink] 29 Nov 2019, 06:22

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