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The function of capital markets is to facilitate an exchange of funds

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The function of capital markets is to facilitate an exchange of funds  [#permalink]

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New post 01 Jul 2018, 22:37
GMATNinja mikemcgarry

278. The author’s main point is argued by

(A) giving examples that support a conventional generalization
(B) showing that the view opposite to the author’s is self-contradictory
(C) criticizing the presuppositions of a proposed plan
(D) showing that omissions in a theoretical description make it inapplicable in certain cases
(E) demonstrating that an alternative hypothesis more closely fits the data


I marked the answer C.
Isn't the author criticizing the presuppositions of a proposed plan??
The last paragraph says that a lot of assumptions are made by financial market studies and the author is clearly criticizing these assumptions.

Could you please help.
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Re: The function of capital markets is to facilitate an exchange of funds  [#permalink]

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New post 20 Jul 2018, 12:53
Boomshockalocka wrote:
GMATNinja

Hi GMATNinja, could you please explain 278? I chose B but the answer is D.


Quote:
278. The author’s main point is argued by

(B) showing that the view opposite to the author’s is self-contradictory

Quote:
For B, "The function of capital markets is to facilitate an exchange of funds among all participants, and yet in practice we find that certain participants are not on a par with others." this sentence indicates that the view opposite to the author's is self-contradictory. Doesn't it?

In this sentence, the author makes a statement (in practice, certain participants are not on par with others) which contradicts the opposing view. This is a case of one person (the author) contradicting another (anyone who believes conventional financial analysis). This is not a case of self-contradiction, which would require the opposition to contradict their own logic or their own statements.

Quote:
278. The author’s main point is argued by

(D) showing that omissions in a theoretical description make it inapplicable in certain cases

Quote:
And I don't understand why D is correct. What is the intended "theoretical description"? And what are those "certain cases"?

The "theoretical description" is that capital markets facilitate an exchange of funds among all participants. This is a conventional view of market participation, and the author disagrees with this conventional view because it omits many cases (i.e. minority communities) wherein capital markets fail to fulfill their functions.

Thinking about this structurally, we see that in the first paragraph, the author declares that the conventional theory about capital markets is inaccurate. In the second paragraph, the author shows cases that are omitted by this conventional theory, and therefore can't be explained by that theory. In the third paragraph, the author explains the assumptions that lead to these cases' being omitted during conventional analysis. This structure matches the language in choice (D), and since we've eliminated every other answer choice, (D) is our best answer.

I hope that helps!
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Re: The function of capital markets is to facilitate an exchange of funds &nbs [#permalink] 20 Jul 2018, 12:53

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