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# To avoid the appearance of conflicts of interest, the board of a major

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Intern
Joined: 20 Jan 2015
Posts: 5
Location: India
Concentration: Finance, Strategy
GMAT 1: 700 Q50 V34
To avoid the appearance of conflicts of interest, the board of a major  [#permalink]

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Updated on: 14 Dec 2017, 08:23
3
00:00

Difficulty:

5% (low)

Question Stats:

86% (01:37) correct 14% (01:40) wrong based on 136 sessions

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To avoid the appearance of conflicts of interest, the board of a major U.S. stock exchange is considering a new policy that would ban former top executives of the exchange from taking positions at publicly traded companies for a period of two years after leaving the stock exchange. Critics of the plan say the policy is unfair because it would likely prevent former top executives of the exchange from earning a decent living.

Which of the following statements, if true, would most strengthen the prediction made by the critics of the proposed company policy?

A. The labor union that represents most of the stock exchange’s employees has made public statements that threaten a strike if the policy is adopted.

B. Former employees of the exchange most often work for publicly traded companies after leaving the exchange.

C. Low-level managers at the exchange have an average tenure of 13 years, one of the longest in the industry.

D. Low-level managers at the exchange most often leave their jobs for positions with the state or federal government.

E. Former top executives of the exchange have a particular set of skills such that they are usually only able to find work with publicly traded companies.

Originally posted by samarthtaneja on 05 May 2016, 00:08.
Last edited by broall on 14 Dec 2017, 08:23, edited 1 time in total.
Reformatted question
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Concentration: Strategy, General Management
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Re: To avoid the appearance of conflicts of interest, the board of a major  [#permalink]

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05 May 2016, 01:48
To avoid conflict of interest --> Ban top executives from taking positions at publicly traded companies for a period of 2 years.
Critics --> Policy is unfair --> Why? --> Because it likely prevents top executives from earning a decent living.

Possible Strenghtener: 1) Top executives are not given opportunity to work elsewhere.
2) Top executives do not have the knowledge to earn a decent living from other sources.

A.The labor union that represents most of the stock exchange’s employees has made public statements that threaten a strike if the policy is adopted. - Incorrect - Irrelevant

B.Former employees of the exchange most often work for publicly traded companies after leaving the exchange. - Incorrect - Since they are working for publicly traded companies, the board is planning to ban them. This option can fit as an assumption.

C.Low-level managers at the exchange have an average tenure of 13 years, one of the longest in the industry. - Incorrect - Irrelevant

D.Low-level managers at the exchange most often leave their jobs for positions with the state or federal government. - Incorrect - Out of context

E.Former top executives of the exchange have a particular set of skills such that they are usually only able to find work with publicly traded companies. - Correct - This option aligns with our second strengthener.

SVP
Joined: 06 Nov 2014
Posts: 1877
Re: To avoid the appearance of conflicts of interest, the board of a major  [#permalink]

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05 May 2016, 03:00
samarthtaneja wrote:
To avoid the appearance of conflicts of interest, the board of a major U.S. stock
exchange is considering a new policy that would ban former top executives of the
exchange from taking positions at publicly traded companies for a period of two
years after leaving the stock exchange. Critics of the plan say the policy is unfair
because it would likely prevent former top executives of the exchange from earning
a decent living.

Which of the following statements, if true, would most strengthen the prediction
made by the critics of the proposed company policy?

A.The labor union that represents most of the stock exchange’s employees has
made public statements that threaten a strike if the policy is adopted.

B.Former employees of the exchange most often work for publicly traded
companies after leaving the exchange.

C.Low-level managers at the exchange have an average tenure of 13 years, one
of the longest in the industry.

D.Low-level managers at the exchange most often leave their jobs for positions
with the state or federal government.

E.Former top executives of the exchange have a particular set of skills such
that they are usually only able to find work with publicly traded companies.

Former top executives of the exchange are not allowed to take taking positions at publicly traded companies for a period of two.
Critics say that this plan is unfair and will not allow the executives to earn a decent living.

The argument of the critics can be strengthened by:

1. The other jobs that the executives will get will not be with a good pay
2. The executives might not be able to do other jobs.

Looking at the answer choices, the option E resonates with our point 2.
It says that the jobs skills of former executives are usually utilized only in the publicaly traded companies.

Rest of the options are simply irrelevant.

Correct Option: E
SVP
Joined: 12 Dec 2016
Posts: 1592
Location: United States
GMAT 1: 700 Q49 V33
GPA: 3.64
Re: To avoid the appearance of conflicts of interest, the board of a major  [#permalink]

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14 Dec 2017, 05:51
To avoid the appearance of conflicts of interest, the board of a major U.S. stock exchange is considering a new policy that would ban former top executives of the exchange from taking positions at publicly traded companies for a period of two years after leaving the stock exchange. Critics of the plan say the policy is unfair because it would likely prevent former top executives of the exchange from earning a decent living.

A. The labor union that represents most of the stock exchange’s employees has made public statements that threaten a strike if the policy is adopted.
B. Former employees of the exchange most often work for publicly traded companies after leaving the exchange.
C. Low-level managers at the exchange have an average tenure of 13 years, one of the longest in the industry.
D. Low-level managers at the exchange most often leave their jobs for positions with the state or federal government.
E. Former top executives of the exchange have a particular set of skills such that they are usually only able to find work with publicly traded companies.
Re: To avoid the appearance of conflicts of interest, the board of a major   [#permalink] 14 Dec 2017, 05:51
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