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# The proposal requiring mutual fund companies to set aside a part...

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Director
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The proposal requiring mutual fund companies to set aside a part...  [#permalink]

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04 Jun 2019, 18:21
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11
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95% (hard)

Question Stats:

24% (01:45) correct 76% (02:06) wrong based on 309 sessions

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The proposal requiring mutual fund companies to set aside a part of their fee for investor education is laudable, but meaningless. The challenge actually lies in finding the right ways of educating investors and making them financially literate.

Which of the following, if true most strongly supports the argument?

(A) People looking to invest in mutual funds currently lack the knowledge to make informed decisions.
(B) Most mutual funds have accumulated large reserves of cash for investor education.
(C) Investing in mutual funds is very different from investing in other financial instruments such as shares and debentures.
(D) Financially literate customers, on the whole, provide more business to mutual fund companies than do financially ignorant ones.
(E) Activities aimed at educating customers cost a lot of money and most mutual funds do not have the cash reserves to conduct such activities.

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Re: The proposal requiring mutual fund companies to set aside a part...  [#permalink]

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04 Jun 2019, 19:25
I feel like we need to make a huge assumption in order to arrive at B.
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Re: The proposal requiring mutual fund companies to set aside a part...  [#permalink]

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04 Jun 2019, 21:20
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B.
The argument says money is not important, how we spend money is important i.e find the right ways to spend money.
B says we already have money, so how we spend it becomes much more important

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Re: The proposal requiring mutual fund companies to set aside a part...  [#permalink]

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04 Jun 2019, 22:11
Can anyone please let me know how option B is correct.
For me option A is the nearest

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Re: The proposal requiring mutual fund companies to set aside a part...  [#permalink]

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05 Jun 2019, 19:55
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3
The proposal requiring mutual fund companies to set aside a part of their fee for investor education is laudable, but meaningless. The challenge actually lies in finding the right ways of educating investors and making them financially literate.

Which of the following, if true most strongly supports the argument?

(A) People looking to invest in mutual funds currently lack the knowledge to make informed decisions.
(B) Most mutual funds have accumulated large reserves of cash for investor education.
(C) Investing in mutual funds is very different from investing in other financial instruments such as shares and debentures.
(D) Financially literate customers, on the whole, provide more business to mutual fund companies than do financially ignorant ones.
(E) Activities aimed at educating customers cost a lot of money and most mutual funds do not have the cash reserves to conduct such activities.

I didn't get the correct answer, but when I look at it now, this is my thought process as to why B is correct:

B says that most mutual funds have accumulated large reserves of cash for investor education. The argument says that this money comes from the mutual fund companies' fees. If these companies have been able to accumulate large reserves of cash through their fees, it means that the investors are making enough money to pay fees to the mutual fund companies. If the investors are making enough money to pay fees to the mutual fund companies, they must be successful in their investments. If they are successful in their investments, they must already be financially literate. If they are financially literate, they do not need investor education. If they do not need investor education, the proposal requiring mutual fund companies to set aside a part of their fee for investor education is meaningless. So B strengthens the argument.
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The proposal requiring mutual fund companies to set aside a part...  [#permalink]

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06 Jun 2019, 02:57
too many assumption have to be made to arrive at b as answer . This question cant be solved in 100 sec time limit. must be above 750 level question. i marked c based on some assumption i made.
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Re: The proposal requiring mutual fund companies to set aside a part...  [#permalink]

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06 Jun 2019, 07:00
1
zeyneptuzun wrote:
The proposal requiring mutual fund companies to set aside a part of their fee for investor education is laudable, but meaningless. The challenge actually lies in finding the right ways of educating investors and making them financially literate.

Which of the following, if true most strongly supports the argument?

(A) People looking to invest in mutual funds currently lack the knowledge to make informed decisions.
(B) Most mutual funds have accumulated large reserves of cash for investor education.
(C) Investing in mutual funds is very different from investing in other financial instruments such as shares and debentures.
(D) Financially literate customers, on the whole, provide more business to mutual fund companies than do financially ignorant ones.
(E) Activities aimed at educating customers cost a lot of money and most mutual funds do not have the cash reserves to conduct such activities.

I didn't get the correct answer, but when I look at it now, this is my thought process as to why B is correct:

B says that most mutual funds have accumulated large reserves of cash for investor education. The argument says that this money comes from the mutual fund companies' fees. If these companies have been able to accumulate large reserves of cash through their fees, it means that the investors are making enough money to pay fees to the mutual fund companies. If the investors are making enough money to pay fees to the mutual fund companies, they must be successful in their investments. If they are successful in their investments, they must already be financially literate. If they are financially literate, they do not need investor education. If they do not need investor education, the proposal requiring mutual fund companies to set aside a part of their fee for investor education is meaningless. So B strengthens the argument.

The question talks about passing a proposal, which will require companies to set aside some reserves for investor education? but the author says it is meanginless? why the proposal can be meaningless? well only if the mutual fund companies already have alot of money for investor education. So focus then should be on something else to improve investor literacy than just keeping some money aside.
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Re: The proposal requiring mutual fund companies to set aside a part...  [#permalink]

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06 Jun 2019, 15:01
1
abhishek31 wrote:
zeyneptuzun wrote:
The proposal requiring mutual fund companies to set aside a part of their fee for investor education is laudable, but meaningless. The challenge actually lies in finding the right ways of educating investors and making them financially literate.

Which of the following, if true most strongly supports the argument?

(A) People looking to invest in mutual funds currently lack the knowledge to make informed decisions.
(B) Most mutual funds have accumulated large reserves of cash for investor education.
(C) Investing in mutual funds is very different from investing in other financial instruments such as shares and debentures.
(D) Financially literate customers, on the whole, provide more business to mutual fund companies than do financially ignorant ones.
(E) Activities aimed at educating customers cost a lot of money and most mutual funds do not have the cash reserves to conduct such activities.

I didn't get the correct answer, but when I look at it now, this is my thought process as to why B is correct:

B says that most mutual funds have accumulated large reserves of cash for investor education. The argument says that this money comes from the mutual fund companies' fees. If these companies have been able to accumulate large reserves of cash through their fees, it means that the investors are making enough money to pay fees to the mutual fund companies. If the investors are making enough money to pay fees to the mutual fund companies, they must be successful in their investments. If they are successful in their investments, they must already be financially literate. If they are financially literate, they do not need investor education. If they do not need investor education, the proposal requiring mutual fund companies to set aside a part of their fee for investor education is meaningless. So B strengthens the argument.

The question talks about passing a proposal, which will require companies to set aside some reserves for investor education? but the author says it is meanginless? why the proposal can be meaningless? well only if the mutual fund companies already have alot of money for investor education. So focus then should be on something else to improve investor literacy than just keeping some money aside.

Well, this was a much easier way to get to the answer lol
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The proposal requiring mutual fund companies to set aside a part...  [#permalink]

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10 Jun 2019, 09:57
The argument clearly states that the issue is with the "ways of educating" - if large sums of money are already set aside for the purpose, the challenge most likely points to ways of utilizing them for maximum effectiveness. B follows.
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Re: The proposal requiring mutual fund companies to set aside a part...  [#permalink]

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11 Jun 2019, 04:08
So this is an inference question.

Option B is an extreme answer choice (Most is written)

according to me option A is better.

@rakesh1989
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The proposal requiring mutual fund companies to set aside a part...  [#permalink]

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Updated on: 11 Jun 2019, 21:08
prags1989 wrote:
So this is an inference question.

Option B is an extreme answer choice (Most is written)

according to me option A is better.

@rakesh1989

Not sure how you thought this was an inference question when we are introducing new pieces of evidence in the answer choices.

We are strengthening the conclusion.
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Originally posted by dcummins on 11 Jun 2019, 04:23.
Last edited by dcummins on 11 Jun 2019, 21:08, edited 1 time in total.
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Re: The proposal requiring mutual fund companies to set aside a part...  [#permalink]

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11 Jun 2019, 20:51
prags1989 wrote:
So this is an inference question.

Option B is an extreme answer choice (Most is written)

according to me option A is better.

@rakesh1989

The question asked you to find an option to support the conclusion; Hence it is strengthening question.

we can call outside info to support the conclusion

Most of the mutual funds have large reserves support the conclusion that "the fees set aside for educating investor is meaningless strategy and that the right way is to know how to educate investors."

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The proposal requiring mutual fund companies to set aside a part...  [#permalink]

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26 Jun 2019, 22:29

Explanation:

The argument concludes that it is of no use making insurance companies create a separate reserve for investor education because the real problem is not of lack of funds but of finding the right activities to educate customers. B strengthens this point by stating that insurance companies do have enough funds at their disposal so the problem has to be something else.

(A) Even if this is true, the reason for this could be that insurance companies do not have enough funds to spend on customer education. This could then weaken the argument by suggesting that insurance companies should indeed keep aside a part of their funds for customer education activities.

(C) Comparison of mutual funds with shares and debentures is irrelevant

(D) Same as A.

(E) Same as A.

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Re: The proposal requiring mutual fund companies to set aside a part...  [#permalink]

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27 Jun 2019, 01:25
But in the statement its mentioned that setting aside money is laudable effort, which I assume means that currently the funds aren't sufficient for the activity and the companies are in process of setting aside amount. Hence feel that A should be the answer.

Please correct if I am wrong
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Re: The proposal requiring mutual fund companies to set aside a part...  [#permalink]

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27 Jun 2019, 06:53
[quote="dcummins"]The proposal requiring mutual fund companies to set aside a part of their fee for investor education is laudable, but meaningless. The challenge actually lies in finding the right ways of educating investors and making them financially literate.

Which of the following, if true most strongly supports the argument?

(A) People looking to invest in mutual funds currently lack the knowledge to make informed decisions.
(B) Most mutual funds have accumulated large reserves of cash for investor education.
(C) Investing in mutual funds is very different from investing in other financial instruments such as shares and debentures.
(D) Financially literate customers, on the whole, provide more business to mutual fund companies than do financially ignorant ones.
(E) Activities aimed at educating customers cost a lot of money and most mutual funds do not have the cash reserves to conduct such activities.[/quot

We have to find which one of the option supports the argument. The author says that mutual funds have been setting aside a part of their fee for investor education. Option B, rightly, validates the authors claim(dosent matter if he thinks its meaningless). If we negate option B the whole argument fails. If funds do not set aside money, then the whole argument falls through.
Re: The proposal requiring mutual fund companies to set aside a part...   [#permalink] 27 Jun 2019, 06:53
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