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# There are actually long term benefits for Wall Street stockbrokers in

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Joined: 18 Mar 2016
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There are actually long term benefits for Wall Street stockbrokers in  [#permalink]

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Updated on: 16 Jun 2019, 23:15
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Difficulty:

45% (medium)

Question Stats:

65% (01:50) correct 35% (02:05) wrong based on 124 sessions

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There are actually long term benefits for Wall Street stockbrokers in a rapidly falling stock market in which most investors are selling and many people are losing a great deal of money. After all, the volume of daily transactions rises dramatically in such a market, and the stockbrokers, who receive a commission on each sale, collect a windfall of commission income.

Which of the following, if true, would most seriously weaken the argument made above?

A) Some investors whose stocks are affected in a falling market have purchased their stocks on a margin - ie. credit- and must complete payment of the full purchase price while their stocks are actually declining in value.

B) Many Wall Street stockbrokers sell not only stocks, but also bonds, money market funds, and insurance-investments that might actually improve in value during a rapidly falling stock market.

C) Only ten percent of the stock- buying and selling on Wall Street is conducted on behalf of individual investors: ninety percent is conducted on behalf of institutional investors.

D) After a rapidly falling market, relatively few stockbrokers give up stock-trading and leave Wall Street.

E) After a rapidly falling market, the volume of trading in the stock market generally declines and remains at a low level for an extended period of time.

Was unable to carry out a POE and wasted a lot of time on this one. Please help in finding the best approach to solve this question.

Originally posted by anubhavzarabi on 16 Jun 2019, 23:08.
Last edited by Bunuel on 16 Jun 2019, 23:15, edited 1 time in total.
Renamed the topic and edited the question.
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There are actually long term benefits for Wall Street stockbrokers in  [#permalink]

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16 Jun 2019, 23:28
1
We have to weaken that this process does not have long term profits for stockbrokers.

a) talking about investors not stockbrokers.

b) Does not talk about long terms although does talk about how they might lose money in short term

D) Useless

e) Talks about long terms loss for stockbrokers.

anubhavzarabi wrote:
There are actually long term benefits for Wall Street stockbrokers in a rapidly falling stock market in which most investors are selling and many people are losing a great deal of money. After all, the volume of daily transactions rises dramatically in such a market, and the stockbrokers, who receive a commission on each sale, collect a windfall of commission income.

Which of the following, if true, would most seriously weaken the argument made above?

A) Some investors whose stocks are affected in a falling market have purchased their stocks on a margin - ie. credit- and must complete payment of the full purchase price while their stocks are actually declining in value.

B) Many Wall Street stockbrokers sell not only stocks, but also bonds, money market funds, and insurance-investments that might actually improve in value during a rapidly falling stock market.

C) Only ten percent of the stock- buying and selling on Wall Street is conducted on behalf of individual investors: ninety percent is conducted on behalf of institutional investors.

D) After a rapidly falling market, relatively few stockbrokers give up stock-trading and leave Wall Street.

E) After a rapidly falling market, the volume of trading in the stock market generally declines and remains at a low level for an extended period of time.

Was unable to carry out a POE and wasted a lot of time on this one. Please help in finding the best approach to solve this question.
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There are actually long term benefits for Wall Street stockbrokers in  [#permalink]

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16 Jun 2019, 23:37
1
There are actually long term benefits for Wall Street stockbrokers in a rapidly falling stock market in which most investors are selling and many people are losing a great deal of money. After all, the volume of daily transactions rises dramatically in such a market, and the stockbrokers, who receive a commission on each sale, collect a windfall of commission income.

Which of the following, if true, would most seriously weaken the argument made above?

A) Some investors whose stocks are affected in a falling market have purchased their stocks on a margin - ie. credit- and must complete payment of the full purchase price while their stocks are actually declining in value.
Irrelevant, as it provides no information about the stock brokers

B) Many Wall Street stockbrokers sell not only stocks, but also bonds, money market funds, and insurance-investments that might actually improve in value during a rapidly falling stock market. Does not talk much about the long term effect. So, this one does not necessarily weaken

C) Only ten percent of the stock- buying and selling on Wall Street is conducted on behalf of individual investors: ninety percent is conducted on behalf of institutional investors.
Irrelevant information. We know nothing about the type of investors and whether the commission is received on aa specific type of investor.

D) After a rapidly falling market, relatively few stockbrokers give up stock-trading and leave Wall Street.
Irrelevant

E) After a rapidly falling market, the volume of trading in the stock market generally declines and remains at a low level for an extended period of time.
This one says that the volume actually declines and not for a short period but for an extended period. Definitely Weakens. Hence the answer
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Re: There are actually long term benefits for Wall Street stockbrokers in  [#permalink]

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17 Jun 2019, 10:17
anubhavzarabi wrote:
There are actually long term benefits for Wall Street stockbrokers in a rapidly falling stock market in which most investors are selling and many people are losing a great deal of money. After all, the volume of daily transactions rises dramatically in such a market, and the stockbrokers, who receive a commission on each sale, collect a windfall of commission income.

Which of the following, if true, would most seriously weaken the argument made above?

A) Some investors whose stocks are affected in a falling market have purchased their stocks on a margin - ie. credit- and must complete payment of the full purchase price while their stocks are actually declining in value.

B) Many Wall Street stockbrokers sell not only stocks, but also bonds, money market funds, and insurance-investments that might actually improve in value during a rapidly falling stock market.

C) Only ten percent of the stock- buying and selling on Wall Street is conducted on behalf of individual investors: ninety percent is conducted on behalf of institutional investors.

D) After a rapidly falling market, relatively few stockbrokers give up stock-trading and leave Wall Street.

E) After a rapidly falling market, the volume of trading in the stock market generally declines and remains at a low level for an extended period of time.

Was unable to carry out a POE and wasted a lot of time on this one. Please help in finding the best approach to solve this question.

We have to prove int he argument that brokers do not earn well.
this can be proved either when people stop buying/selling stock or brokers leave the market.
Option E clearly states one of the given assummptions
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18 Jun 2019, 00:58
E refutes premise provided in the argument. The argument says “the volume of daily transaction raises”, but E says “declines”. I understand that premise itself cannot be challenged and the answer shall challenge its assumption(s) of the argument. So, I think E shall not be the correct answer because it does not follow this discipline. Please correct me.

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There are actually long term benefits for Wall Street stockbrokers in   [#permalink] 18 Jun 2019, 00:58
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