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29 May 2025, 00:30
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B
Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
95%
(hard)
Question Stats:
20% (01:56) correct
80%
(02:10)
wrong
based on 168
sessions
History
Date
Time
Result
Not Attempted Yet
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.
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.
30 May 2025, 09:50
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Quote:
(A) People looking to invest in mutual funds currently lack the knowledge to make informed decisions.
Although I marked (A) while solving, it is incorrect as it restates the premise of the entire stimulus that 'investor education is needed'. The answer that best supports the argument should help prove one or both of the below:
1. accumulating cash reserves is useless
2. rather focus should be on the medium of educating
Quote:
(B) Most mutual funds have accumulated large reserves of cash for investor education.
connects both 1 and 2 pointing out that as most of mutual funds have already amassed large amount towards investor education, there is no point focusing more on that.
Quote:
(C) Investing in mutual funds is very different from investing in other financial instruments such as shares and debentures.
comparison between mutual funds and different financial instruments is not discussed anywhere. IrrelevantQuote:
(D) Financially literate customers, on the whole, provide more business to mutual fund companies than do financially ignorant ones.
Advantage of investor education could be a tempting answer choice and connects with the second objective of 'why should we focus on investor education'. Will keep this but in the end eliminate it when compared to 'B' as the latter connects both 1 and 2 and hence, a better option.
Quote:
(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.
This AC rather weakens the argument implying cash amassing is the need of the hour.MartyMurray KarishmaB would appreciate your feedback.
01 Jun 2025, 19:15
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Bunuel
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.
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.
Official Explanation
Answer: B
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.
(B) The correct answer.
(C) Comparison of mutual funds with shares and debentures is irrelevant.
(D) Same as A.
(E) Same as A.
