The average age of chief executive officers (CEOs) in a large sample

Question

The average age of chief executive officers (CEO’s) in a large sample of companies is 57. The average age of CEO’s in those same companies 20 years ago was approximately eight years younger. On the basis of those data, it can be concluded that CEO’s in general tend to be older now.

Which of the following casts the most doubt on the conclusion drawn above?

(A) The dates when the CEO’s assumed their current positions have not been specified.

(B) No information is given concerning the average number of years that CEO’s remain in office.

(C) The information is based only on companies that have been operating for at least 20 years.

(D) Only approximate information is given concerning the average age of the CEO’s 20 years ago.

(E) Information concerning the exact number of companies in the sample has not been given.

KarishmaB · Accepted Answer

Even if there are many such cases (the CEO has been the same for the last 20 yrs), it still doesn't weaken our conclusion. Our conclusion is that CEO’s in general tend to be older now. It doesn't matter why the CEOs are older now. The conclusion says that they are older and that's true even if the CEOs have grown old while on the CEO chair.

On the other hand, option (C) says that the conclusion is being drawn on a sample of a particular type of companies. This means you cannot generalize whatever you observe in the sample. Hence it weakens our conclusion that CEO’s in general tend to be older now.

No. The argument only says that CEOs tend to be older now. It is not the same as 'companies are appointing older CEOs now.'

firasath · Answer

The average age of chief executive officers in a large sample of companies is 57.The average age of CEO's in those same companies 20 years ago was approximately eight years younger. On the basis of those data,it can be concluded that CEO's in general tend to be older now.

Which of the following casts the most doubt on the conclusion drawn above?

It helps to give the reasons why you eliminated the wrong answers....

(A) The dates when the CEO's assumed their current positions have not been specified.

The data represents the average age of CEO of the companies in the sample. It doesn't matter when they took their positions, just that they are the current CEOs.

(B) No information is given concerning the avg no of years that CEO's remain in office.

Again, the data is comparing ages of CEOs today (current CEO) vs. the age of the CEO 20 years ago, whoever it was. It doesn't matter how long they've been in office.

(C) The information is based only on companies that have been operating for at least 20 years.

The data sample is limited to only 20+ year old companies... This should give you a clue that a limited sample cannot be the basis for a wide generalization such as the conclusion of the stimulus. This is the answer.

(D) Only approximate information is given concerning the avg age of the CEO's 20 years ago.

The approximations of the data doesn't really change the data, one set is higher and one is lower.

(E) Information concerning the exact number of companies in the sample has not been given.

if the data sample was from all of the fortune 1000 companies vs. only 10 companies, the data would reflect a more accurate representation. This point could weaken the conclusion slightly. However, C is a stronger argument.

11MBA · Answer

The question states in  a large sample  the CEO's are on average 8 years older than they were 20 years ago. Because the question already tells you that a large sample is used, knowing the exact number of firms in the survey to determine whether the study is viable or not is not necessary. Also, so what if you know the number of companies that took the survey. That information is useless because you don't know how many firms out of how many considered took the survey. For example, if you know 50 firms took the survey. Is it 50 out of 100 firms or 50 out of 10,000.

shalva · Answer

You have to show that in fact CEOs aren't getting older. Good way to do it is to attack the evidence - that is the survey of 57 companies. Maybe these companies are not representative of market in general, so we cannot deduce the general trend based solely on these companies.

(C) does exactly the same - if the survey includes only the companies with history of 20 years or more, it cannot be representative of all companies and cannot describe general trend.

imadkho · Answer

C strengthens the conclusion. The sample should be the same and should consist of companies which have been in business for at least 20 years; otherwise, how could any conclusion be drawn ?

I would pick A.

Please indicate the source.

ChrisLele · Answer

@imadkho,

The question is asking us which of the following would cast the most doubt on the conclusion. The conclusion of course rests on the sample size, so when you ask how the argument can draw a valid conclusion, that's the whole point: the argument cannot make a valid conclusion.

Specifically, when it makes its conclusion regarding companies today, it fails to take into account those companies that weren't around 20 years ago. Therefore, the conclusion cannot be valid. (C) speaks to this.

(A) only talks about starting dates. We do not care when CEOs started, but old they are now. So even if a CEO started 20 years ago, he/she could still only be 45 years-old vs. one who started yesterday at a startup but is 60 years old (assuming start ups still employ someone who is 60

)

sudhirmadaan · Answer

i m confused this is weaken question why are some posts based on inference , to weaken a conclusion we have to add new information and making the assumption false, C cannot be the assumption , In C we are given with the fact that is already stated in question.

Expert please correct me if i am missing anything.
VeritasPrepKarishma

Expert please correct me if i am missing anything.
 VeritasPrepKarishma

Marcab · Answer

Then I agree with C, but I still feel A is a contender.
My explanation: Suppose the survey companies analyse the age of CEOs.The sample consists of 100 CEOs among whom 80 were made the CEO at the age of 45. Now these CEOs are now aged 57, but still can you say that now a days CEOs are getting older. Obviously not!

KarishmaB · Answer

We are talking about 2 points in time. 20 yrs back the avg age was 40. Today the avg age is 60. The CEOs are definitely getting older. The point is not why they are getting older. The company has retained a 60 yr old for the top position. It has not brought in a young gun. They have the freedom to bring in a new guy whenever they desire. It doesn't matter why the company has retained the old guy - his experience or his performance whatever. What matters is that at this point, its CEO is a 60 yr old and the company is fine with it. It is not a lifetime position awarded to the CEOs. If, on average, the companies are happy with the older lot, it means the CEOs are getting older now.

pqhai · Answer

Very good question in term of statistic logic. C is correct.
 
What's wrong if the sample does not represent characteristics of the whole group. 
Premise 1: the average age of CEOs of the companies 20 years ago was 49 (57 - 8).
Premise 2: the average age of CEOs of the   same companies   is 57 now.
Conclusion: Average age of CEOS   in general   is older

Wrong sampling technique because the companies that were chosen do not represent characteristics of the whole group. For instance, new established companies (less than 20 years old) often have young CEOs.

pqhai · Answer

I'm happy to help.

IMPORTANT NOTES:  
 This question is about “sampling” like the technique used in statistic (Quant). 
KEY point is: the sample used to generalize the whole set MUST be comprehensive enough. 
 
 ANALYZE THE STIMULUS:  
Fact: The average age of chief executive officers (CEO’s) in a large sample of companies is 57. 
Fact: The average age of CEO’s in those same companies 20 years ago was approximately eight years younger. 
Conclusion: CEO’s in general tend to be older now.

Which of the following casts the most doubt on the conclusion drawn above?

ANALYZE EACH ANSWER:

(A) The dates when the CEO’s assumed their current positions have not been specified.
 Wrong.  A may weaken or NOT. What if the CEO’s are appointed to their position at younger ages. Thus, A does not weaken the conclusion.

(B) No information is given concerning the average number of years that CEO’s remain in office.
 Wrong.  The average number of years in office DIFFERS from how old the CEO’s are when they are appointed to their positions.

(C) The information is based only on companies that have been operating for at least 20 years.
  Correct.   C weakens the conclusion by showing that  the sample  used to  GENERALIZE  the conclusion is  not comprehensive.  The argument just uses information of companies operating for at least 20 years to make a conclusion for every CEO’s.

(D) Only approximate information is given concerning the average age of the CEO’s 20 years ago.
 Wrong.  The conclusion may be still correct if the information of the average age of the CEO’s 20 years ago is COMPRESHENSIVE enough. It means the sample can represent the whole set.

(E) Information concerning the exact number of companies in the sample has not been given.
 Wrong.  Out of scope. We do not need information about how many companies in the sample. There are 20, or 200. We don’t know. Thus, E does not help.

Hope it helps.

Fariz · Answer

Why not E. If the number of the companies used for base of calculation of the average is different between the years, then the conclusion is wrong and weaken the argument. Still C is not understandable as it does not give us any hidden assumption regarding generalization of the companies to all market. I think we can not make such assumption.

KarishmaB · Answer

(E) is not correct.
The argument gives the following information:
"The average age of chief executive officers (CEO’s) in a large sample of companies is 57. The average age of CEO’s in those same companies 20 years ago was approximately eight years younger."

We know the sample is large and the same companies were a part of the research 20 yrs back too. As for the number of companies being a bit different, I don't see how that is a problem - say there were 100 companies last time and 90 this time (10 shut shop). These 90 are still representative of the previous 100.

The problem is that from this data we are generalizing - CEO’s  in general  tend to be older now.

What if these companies (which are at least 20 yrs old) are not representative of all companies. Then we cannot generalize. What if the newer companies have very young CEOs? Hence (C) weakens the argument.

KarishmaB · Answer

This is a weaken question. We have to find the conclusion and weaken it.

Premises:

The average age of CEOs in a large sample of companies is 57. 
The average age of CEO’s in those same companies 20 years ago was approximately eight years younger.

Conclusion: CEO’s in general tend to be older now.

Notice what the conclusion says: CEOs IN GENERAL tend to be older now. How can you deduce something about CEOs in general now when you have researched CEOs of only those companies which were in operation 20 yrs ago too. What about all the companies that came up in the last 20 years? What if the CEOs of the younger companies are much younger. Then the conclusion weakens. Option (C) points out this flaw in the reasoning. Hence it weakens the conclusion.

KarishmaB · Answer

Here is why the answer is not B.

Premises:

The average age of CEOs in a large sample of companies is 57. 
The average age of CEO’s in those same companies 20 years ago was approximately eight years younger.

Conclusion: CEO’s in general tend to be older now.

(B) No information is given concerning the average number of years that CEO’s remain in office.

This is irrelevant. Does it matter whether the CEO's remain in office for 10 years or for 2 years? Point is, it doesn't matter whether the 20 companies have the same CEOs that they had 8 yrs ago or they change CEO's every year and have been hiring older CEOs. In any case, in those 20 companies CEOs are older today than they were 8 yrs ago. So option (B) does not weaken the conclusion.

glagad · Answer

So, my reasoning for selecting B was that a CEO who has served in the office for a longer period of time, will age and contribute to an increase in the higher average age of CEOs, a strong weakener for the conclusion drawn in the argument.

Can you tell me your thoughts about the same?

Can you tell me your thoughts about the same?

miag · Answer

Hi,

Actually I would highlight a couple of areas for you to reassess your reasoning:
i) Does a CEO having served in office for a longer period of time necessarily mean that they are older? or will contribute to an increase in a higher average age of CEOs? Consider a case where someone joined the company at a younger age due to being highly competent and progressed up - they could be still at a young age when they reach CEO level.
>> Their tenure doesn’t tell us anything about the ages of the CEOs who were in those positions two decades earlier.

ii) Hence, even if we had this information, we would not be able to clearly determine whether this information weakens or strengthens the conclusion.

Hope this helps!

glagad

So, my reasoning for selecting B was that a CEO who has served in the office for a longer period of time, will age and contribute to an increase in the higher average age of CEOs, a strong weakener for the conclusion drawn in the argument.

Can you tell me your thoughts about the same?

chloreton · Answer

I have a doubt in here, the argument mentions " On the basis of those data ", so how can you attack the same thing in the answer. We have to assume the argument is true right? We already know author is comparing the same companies, and now we are attacking the author itself. Is it possible? Someone please share your thoughts.

guddo · Answer

Yes, I suppose, it’s possible.

In these questions, you assume the stated facts are true, but you do not assume the conclusion logically follows. The phrase “On the basis of those data” is exactly what you’re allowed to challenge: whether those data are  enough  to support “CEOs in general.”

Choice  C  does not say the data are false. It says the data come from a  restricted sample  (only companies that existed 20 years ago), so the conclusion about “in general” may not follow because newer companies today could have younger CEOs. That’s a classic  representativeness  issue.

The average age of chief executive officers (CEOs) in a large sample

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The average age of chief executive officers (CEOs) in a large sample

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