Since it has become known that several of a bank's top executives have

Hi,

If i can de clutter the argument

Investors are relieved
Why? how did they arrive at this situation
because CEO's of banks are buying stocks in their own bank,
and
they believe that "since top executives evidently have faith in the bank's financial soundnes"
So the 'rumors that bank is in bad health must be false" ( Intermediate Conclusion)
hence investors are relived

Such a reasoning is might be overoptimistic, ( THE MAIN CONCLUSION OF THE ARGUMENT)
because corporate executives have been known to buy shares in their own company in a calculated attempt to dispel negative rumors about the company's health. ( other aspect of CEO's move to overcome something )


Option A
The first describes evidence (Yes BF-1 describes a evidence) that has been taken as supporting a conclusion (Which supports a intermediate conclusion that rumors are false ) ; the second gives a reason for questioning that support. Second BF questions BF-1 where by it questions supports given for the conclusion arrived at by investors that rumors about banks financial health must be false.


Hope this helps

Dear AjiteshArun,

I would like to seek your view on how to avoid traps in choice D. confidently.

(D) The first describes the circumstance that the argument as a whole seeks to explain; the second gives the explanation that the argument seeks to establish.

The second part does in a way explain the circumstance depicted in the first. Also, the explanation can contain some uncertainty. This is consistent with "might" in the main conclusion in the passage.

When I see choice D., I am really not sure how to reject choice D. on solid grounds.

Please help

Hi varotkorn,

The second boldfaced portion is not really the explanation for the first boldfaced portion. Look at it this way:
(a) Present: several of a bank's top executives have been buying shares in their own bank
(b) Past: corporate executives have been known to buy shares in their own company in a calculated attempt to dispel negative rumors about the company's health

We can't say that the entire boldfaced portion in (b) explains the boldfaced portion in (a). That is, we can't say (b), therefore (a).

Also, as you pointed out, the possible explanation that is contained in the second boldfaced portion is not some one "true" explanation that the argument tries to establish. Instead, the argument takes the position that the reasoning of the depositors might be overoptimistic.

The second boldface sounds only like a reasoning. Hence A.

Posted from my mobile device

I have attempted this question thrice in a span of 7 months ans always got it wrong.

My understanding is that Author is countering the depositors reasoning by giving his own explanation. I right understood that author's conclusion is that depositors must be wrong and they have an over optimistic reasoning.

In my last two attempts(both attempted in a very short difference of time so my understanding is more or less similar) i marked D(2nd attempt) and E(3rd attempt). In both the options i was little skeptical of the first part and strongly favored E over D for second art, but went ahead with them since i had immediately rejected A and B.

On re-looking the options A & B and analyzing my understanding i see that i misunderstood the part of 'a conclusion' to author's conclusion.
So, my question is .. Can i say that whenever 'a conclusion' appears in an option it is for intermediate conclusion or some conclusion other than author's??
And for author 'the conclusion' would be used

Am i correct in saying that.??

VeritasKarishma
Hello mam,
Does it mean that ''Author will establish something by his/her conclusion NOT by premise?"

So, can we conclude that if the answer option does not explicitly say that it is the ''main conclusion'', we will take it as common views/general people's ''conclusion'', right?

(A) The first describes evidence that has been taken as supporting a conclusion; the second gives a reason for questioning that support.
Correct. The first boldfaced portion is the evidence that is used by the shareholders to support their conclusion that the bank execs are buying shares BECAUSE they think the company is sound. The second boldface gives an alternate explanation for why they are buying shares prove that the bank execs buying shares may not actually support the shareholders conclusion.

(B) The first describes evidence that has been taken as supporting a conclusion; the second states a contrary conclusion that is the main conclusion of the argument.
Wrong. The first boldface does indeed provide evidence that supports the shareholders' conclusion, but the second boldface is not a contrary conclusion, it is simply a reason that the sharehoders might be wrong in thinking that the buyback of shares proves the soundness of the company.

(C) The first provides evidence in support of the main conclusion of the argument; the second states that conclusion.
Wrong. The first boldface is evidence in support of what the shareholders think, not the author. Additionally, the second boldface is not the conclusion, it is simply an alternate explanation for why they are buying shares. The author's conclusion is: "Such reasoning (execs buyback shares = financial soundness) might well be overoptimistic.

(D) The first describes the circumstance that the argument as a whole seeks to explain; the second gives the explanation that the argument seeks to establish.
Wrong. The first boldface is not a circumstance that the argument is trying to explain, instead, it is evidence in support for the conclusion of the shareholders. Also, the second boldface is an alternate explanation, but it is not the argument that is being established. The argument that is being established is the author's conclusion. If anything, it is evidence for the author's conclusion that the shareholders may be wrong.

(E) The first describes the circumstance that the argument as a whole seeks to explain; the second provides evidence in support of the explanation that the argument seeks to establish.
Wrong. The first boldface is not a circumstance that the argument tries to explain (see D explanation for more info). The second boldface is not evidence, it is simply an alternate explanation.

I thought (D) was correct.
Because the main conclusion is "Such reasoning might well be overoptimistic" and 2nd boldface is a support for this conclusion.
Why (D) is incorrect?
I can't understand why 1st one is "evidence that has been taken as supporting a conclusion".

Take a look at this post for a breakdown of the passage and explanation of (D), and let us know whether that clears it up!

Hi Karishma,
I read the article posted here- https://www.gmatclub.com/forum/veritas-prep-resource-links-no-longer-available-399979.html#/2013/03 ... -the-gmat/
I have a query on this. Don't we just focus on the text provided in the argument and do not bring outside knowledge. So, here thinking that 'that one must have five years of work experience and a 90th percentile GMAT score'(from the passage) is not enough kind of contradicts the whole 'not bring the outside knowledge' thing. Please clarify on this.

First is the conclusion for which arguments are presented but the second opposes the argument. So, the answer is A.

Since it has become known that several of a bank's top executives have been buying shares in their own bank, the bank's depositors, who had been worried by rumors that the bank faced impending financial collapse, have been greatly relieved. They reason that, since top executives evidently have faith in the bank's financial soundness, those worrisome rumors must be false. Such reasoning might well be overoptimistic, however, since corporate executives have been known to buy shares in their own company in a calculated attempt to dispel negative rumors about the company's health.

To begin, start by identifying the two main conclusions present in the argument. That will make life easier.

Conclusion 1: The worrisome rumours, from the perspective of the bank's depositors, must be false.
Conclusion 2: Bank depositor's reasoning might well be overly optimistic.

In the argument given, the two boldfaced portions play which of the following roles?

(A) The first describes evidence that has been taken as supporting a conclusion; the second gives a reason for questioning that support.
Correct. BF1 is evidence/observation made by the depositors who then conclude from that, that the rumors must be false. BF2 is a different interpretation of what the share purchases actually mean ...the purchases are indicative of an attempt by execs to dispel bad rumours NOT those same exec's confidence in the company.

(B) The first describes evidence that has been taken as supporting a conclusion; the second states a contrary conclusion that is the main conclusion of the argument.
BF2 is not a conclusion

(C) The first provides evidence in support of the main conclusion of the argument; the second states that conclusion.
BF2 is not a conclusion and it most certainly IS NOT the conclusion that the depositor's reached, which is what this choice implies

(D) The first describes the circumstance that the argument as a whole seeks to explain; the second gives the explanation that the argument seeks to establish.
Circumstance? No. The passage is also not seeking to establish the explanation.

(E) The first describes the circumstance that the argument as a whole seeks to explain; the second provides evidence in support of the explanation that the argument seeks to establish.
Circumstance? No.

Since it has become known that several of a bank's top executives have been buying shares in their own bank, the bank's depositors, who had been worried by rumors that the bank faced impending financial collapse, have been greatly relieved. They reason that, since top executives evidently have faith in the bank's financial soundness, those worrisome rumors must be false. Such reasoning might well be overoptimistic, however, since corporate executives have been known to buy shares in their own company in a calculated attempt to dispel negative rumors about the company's health.

In the argument given, the two boldfaced portions play which of the following roles?


(A) The first describes evidence that has been taken as supporting a conclusion; the second gives a reason for questioning that support.

(B) The first describes evidence that has been taken as supporting a conclusion; the second states a contrary conclusion that is the main conclusion of the argument.

(C) The first provides evidence in support of the main conclusion of the argument; the second states that conclusion.

(D) The first describes the circumstance that the argument as a whole seeks to explain; the second gives the explanation that the argument seeks to establish.

(E) The first describes the circumstance that the argument as a whole seeks to explain; the second provides evidence in support of the explanation that the argument seeks to establish.

Let’s look at the stimulus given-

Since it has become known that several of a bank's top executives have been buying shares in their own bank, the bank's depositors, who had been worried by rumors that the bank faced impending financial collapse, have been greatly relieved.
They reason that, since top executives evidently have faith in the bank's financial soundness, those worrisome rumors must be false.

Opinion/ conclusion of the author-

Such reasoning might well be overoptimistic,

Reason-
since corporate executives have been known to buy shares in their own company in a calculated attempt to dispel negative rumors about the company's health.

The author’s conclusion that -“such reasoning might well be overoptimistic” talks about the reasoning of the bank depositors.

The second BF is not the main conclusion or counter conclusion of the author.
Eliminate B and C.

The first BF is used by the bank’s depositors to support their stand. The author goes on to conclude that their reasoning might well be overoptimistic and the second BF gives the reasoning for that.

The first BF is not in support of the main conclusion of the argument (author’s conclusion). Nor does it describe the circumstance that the argument as a whole seeks to explain. Eliminate C,D, and E.

Option A is correct.
(A) The first describes evidence that has been taken as supporting a conclusion; the second gives a reason for questioning that support.

Vishnupriya
GMAT Verbal SME

Does the argument have 2 conclusions?
worrisome rumors must be false- Interim conclusion
Such reasoning might well be overoptimistic- main conclusion

What is the meaning of the word "circumstance" given in options D and E?
Just as words such as evidence, premise has their own meanings, what is the relevance of the word circumstance?

The words such as "evidence" or "conclusion" are useful because they capture the function of a specific line in an argument. In other words, they help us determine why the author included a particular piece of the passage, and how that piece fits into the author's argument as a whole.

The word "circumstance" doesn't really capture that same information, so there's no need to highlight this word as something that will be particularly useful to help you work through other CR questions. Of course, it's generally a good idea to expand your vocabulary as you study for the GMAT and there's no harm in looking up unfamiliar words as you go -- but we wouldn't necessarily recommend that you include the word "circumstance" as a super important piece of GMAT CR.

Both (D) and (E) state that the first bold face "describes the circumstance that the argument as a whole seeks to explain."

Here, "circumstance" just means "situation" or "state of affairs." The first bold face does indeed describe a situation: "several of a bank's top executives have been buying shares in their own bank."

However, the author's goal is not to explain why the execs are buying shares. The author does not pretend to know the motives behind the execs actions. All the author wants to show is that the depositors' reasoning might be wrong. So the first half of (D) and (E) do not accurately describe the purpose of the argument as a whole. Eliminate (D) and (E).

I hope that helps!