Nearly its most ethnically diverse state, California has both the high

Official Explanation:

Read the Original Sentence Carefully, Looking for Errors:

The original sentence has an imprecise modifier. Opening modifiers should logically refer to what comes immediately after the comma. In this case, that's "California." The introductory phrase contains the possessive pronoun "its," which incorrectly suggests that California contains numerous states.

Scan and Group the Answer Choices:

(A) and (B) have imprecise modifiers, suggesting aspects of California that are not logically implied by the sentence. (C), (D), and (E) require further examination.

Eliminate Wrong Answer Choices:

(A) is out because "its" does not logically refer to California. (B) is out because California is not analyzing anything.

(C) distorts the intention of the original sentence by failing to indicate the degree of ethnic diversity. California is being described as a highly diverse state, not just a state that happens to have diversity . Furthermore, it doesn't make sense to describe "ethnic diversity" as something that can be "contained."

(D) contains a new misplaced modifier, since the first phrase, "Ethnically diverse," cannot possibly modify the second one, "of the fifty states." This choice also loses the comparative "most" and thus distorts the intended meaning of the sentence.

(E) is correct, clearly indicating the original sentence’s intention that California is a state in the Union and that it is one of the most ethnically diverse states.

TAKEAWAY: Watch out for answers that do not create a logical connection between phrases. In this case, for example, a pronoun needed a logical antecedent.