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# QOTD: Since it has become known that several of a bank's top

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MBA Section Director
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QOTD: Since it has become known that several of a bank's top [#permalink]

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28 Mar 2018, 08:54
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95% (hard)

Question Stats:

48% (01:26) correct 52% (01:37) wrong based on 363 sessions

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Verbal Question of The Day: Day 253: Sentence Correction

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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.

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QOTD: Since it has become known that several of a bank's top [#permalink]

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28 Mar 2018, 08:56
9
1
Since this is a Bold Face question, let's start by ignoring the BF and focusing on the conclusion and argument. The conclusion is that "[the reasoning of the bank's depositor's] might well be overoptimistic." Now let's breakdown the argument (again, ignore the BF for now):

• First, there were "rumors that the bank faced-impending financial collapse." These rumors made the bank's depositors worried.
• Then, it became known that "several of a bank's top executives have been buying shares in their own bank." This news made the bank's depositors relieved (i.e. made them stop worrying).
• Why were they relieved by this news? "They reason that, since top executives evidently have faith in the bank's financial soundness, those worrisome rumors must be false." - If several of the bank's top execs have been buying shares in their own bank, they must have faith in the bank's financial soundness. Thus, according to the depositors, the actions of the execs shows that the rumors about financial collapse must be false.
• Why does the author believe that the depositors are being overoptimistic? 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"

According to the depositors, the execs actions are evidence that the execs have faith in the bank's financial soundness. The author suggests an alternative explanation for the execs actions. The execs might be buying the shares NOT because they have faith but because they want to dispel negative rumors about the company's health. Obviously such rumors, true or not, would be bad for the company, so it makes sense that execs would want to dispel those rumors.

Now that we understand the argument, let's see how the boldfaced portions fit into that argument:

1) "several of a bank's top executives have been buying shares in their own bank" - The depositors took this as evidence that the execs had faith in the bank's financial soundness. According to the author, this evidence does NOT necessarily support the depositors' belief.
2) "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 other words, "BECAUSE there's another possible explanation," the author questions the depositors' logic. The 2nd boldfaced portion is the reason why the author questions their logic

Which answer choice best describes the boldfaced portions?

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

The depositors believe that the first BF portion is evidence that the execs had faith in the bank's financial soundness. Thus, the first describes evidence that has been taken as supporting the conclusion of the depositors. The first half looks good.

The second BF portion explains WHY the author questions the depositors' logic. The 2nd includes an alternative explanation for the execs actions. So perhaps those actions do NOT support the conclusion of the depositors. Thus, the 2nd gives a reason for questioning whether the 1st actually supports the depositors' conclusion. (A) looks good.

Quote:
(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.

As described for (A), the first part looks good. But the second part is not the author's conclusion. The author's conclusion (the contrary conclusion) is that "[the reasoning of the bank's depositor's] might well be overoptimistic." The second BF portion supports the author's conclusion, but it is not the conclusion itself. Eliminate (B).

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

The first is evidence in support of the depositors' conclusion, not the main conclusion of the argument. Again, the second is not the main conclusion. Eliminate (C).

Quote:
(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 author does not claim that the execs are buying shares 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." In other words, the 2nd portion is not presented as an explanation itself. Instead, it is the reason the author questions the depositors' explanation.

Also, 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) does not accurately describe the purpose of the argument as a whole. Eliminate (D).

Quote:
(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.

The author is not necessarily trying to establish that the execs were buying shares in their own company in a calculated attempt to dispel negative rumors about the company's health. The author simply wants to present this possibility to show that the depositors might be wrong.

Also, as described for (D), the first half does not accurately describe the purpose of the argument as a whole. Eliminate (E).

(A) is the best option.
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##### General Discussion
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Re: QOTD: Since it has become known that several of a bank's top [#permalink]

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29 Mar 2018, 10:04
GMATNinja wrote:
Since this is a Bold Face question, let's start by ignoring the BF and focusing on the conclusion and argument. The conclusion is that "[the reasoning of the bank's depositor's] might well be overoptimistic." Now let's breakdown the argument (again, ignore the BF for now):

• First, there were "rumors that the bank faced-impending financial collapse." These rumors made the bank's depositors worried.
• Then, it became known that "several of a bank's top executives have been buying shares in their own bank." This news made the bank's depositors relieved (i.e. made them stop worrying).
• Why were they relieved by this news? "They reason that, since top executives evidently have faith in the bank's financial soundness, those worrisome rumors must be false." - If several of the bank's top execs have been buying shares in their own bank, they must have faith in the bank's financial soundness. Thus, according to the depositors, the actions of the execs shows that the rumors about financial collapse must be false.
• Why does the author believe that the depositors are being overoptimistic? 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"

According to the depositors, the execs actions are evidence that the execs have faith in the bank's financial soundness. The author suggests an alternative explanation for the execs actions. The execs might be buying the shares NOT because they have faith but because they want to dispel negative rumors about the company's health. Obviously such rumors, true or not, would be bad for the company, so it makes sense that execs would want to dispel those rumors.

Now that we understand the argument, let's see how the boldfaced portions fit into that argument:

1) "several of a bank's top executives have been buying shares in their own bank" - The depositors took this as evidence that the execs had faith in the bank's financial soundness. According to the author, this evidence does NOT necessarily support the depositors' belief.
2) "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 other words, "BECAUSE there's another possible explanation," the author questions the depositors' logic. The 2nd boldfaced portion is the reason why the author questions their logic

Which answer choice best describes the boldfaced portions?

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

The depositors believe that the first BF portion is evidence that the execs had faith in the bank's financial soundness. Thus, the first describes evidence that has been taken as supporting the conclusion of the depositors. The first half looks good.

The second BF portion explains WHY the author questions the depositors' logic. The 2nd includes an alternative explanation for the execs actions. So perhaps those actions do NOT support the conclusion of the depositors. Thus, the 2nd gives a reason for questioning whether the 1st actually supports the depositors' conclusion. (A) looks good.

Quote:
(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.

As described for (A), the first part looks good. But the second part is not the author's conclusion. The author's conclusion (the contrary conclusion) is that "[the reasoning of the bank's depositor's] might well be overoptimistic." The second BF portion supports the author's conclusion, but it is not the conclusion itself. Eliminate (B).

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

The first is evidence in support of the depositors' conclusion, not the main conclusion of the argument. Again, the second is not the main conclusion. Eliminate (C).

Quote:
(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 author does not claim that the execs are buying shares 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." In other words, the 2nd portion is not presented as an explanation itself. Instead, it is the reason the author questions the depositors' explanation.

Also, 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) does not accurately describe the purpose of the argument as a whole. Eliminate (D).

Quote:
(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.

The author is not necessarily trying to establish that the execs were buying shares in their own company in a calculated attempt to dispel negative rumors about the company's health. The author simply wants to present this possibility to show that the depositors might be wrong.

Also, as described for (D), the first half does not accurately describe the purpose of the argument as a whole. Eliminate (E).

(A) is the best option.

Thanks for the explanation !!
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Re: QOTD: Since it has become known that several of a bank's top [#permalink]

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29 Mar 2018, 12:14
A, but this one is tricky. If the entire last sentence had been bolded the correct answer would be B. But since the part of the sentence that actually represents the conclusion "Such reasoning might well be overoptimistic" is NOT included in the sections we are comparing, we can eliminate B and conclude that A is correct.
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QOTD: Since it has become known that several of a bank's top [#permalink]

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15 Apr 2018, 03:59
GMATNinja VeritasPrepKarishma

I was able to correctly identify main conclusion of argument as :
Such reasoning might well be overoptimistic

The think that tricked me is to catch purpose of however
that followed main conclusion.

Also, in typical bold face question, do we not link bold face to
main conclusion than linking it to a conclusion (say conclusion of
depositors in this eg as in (A)
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Re: QOTD: Since it has become known that several of a bank's top [#permalink]

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15 Apr 2018, 04:34
A. Simply focus on “however” and “questioning “

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QOTD: Since it has become known that several of a bank's top [#permalink]

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17 Apr 2018, 01:46
1
GMATNinja VeritasPrepKarishma

I was able to correctly identify main conclusion of argument as :
Such reasoning might well be overoptimistic

The think that tricked me is to catch purpose of however
that followed main conclusion.

Also, in typical bold face question, do we not link bold face to
main conclusion than linking it to a conclusion (say conclusion of
depositors in this eg as in (A)

Look at the entire sentence:
"Such reasoning might well be overoptimistic, however, since corporate executives have been known to buy shares in their own company..."

"however" is the connector for "such reasoning might well be overoptimistic" with the part of the argument before it.
You could just as well place it before like this: "However, such reasoning might well be overoptimistic,"
"However" shows contrast with the argument before it.

The connector "since" and what follows gives the reason for why such reasoning may be overoptimistic.

The role played by the sentence in bold depends on the argument. If the argument has a main conclusion and a sub conclusion, a sentence in bold could support either, be against either or be either.
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QOTD: Since it has become known that several of a bank's top   [#permalink] 17 Apr 2018, 01:46
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