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Abhi077
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01 Feb 2020, 00:19
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74% (01:20) correct
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based on 295
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Venture capital firms pump millions of dollars each year into a variety of start-up companies, expecting most to fail but a few to give astronomical returns. However, optimism and positivity are keys to success in the start-up industry; no start-up wants to admit that it is on its way towards failure. Therefore, venture capital firms remain uncertain about the status of a majority of their investments.
The conclusion drawn above is based on the assumption that
A. most start-ups have a transparent management hierarchy
B. start-ups should be rewarded for accurately reporting problems to their investors
C. the threat of failure is always good for start-ups, since it helps them maintain their focus
D. investors obtain information about the start-up from no source other than the start-up itself
E. some investors are less concerned with truth about a start-up's management than about the results
The conclusion drawn above is based on the assumption that
A. most start-ups have a transparent management hierarchy
B. start-ups should be rewarded for accurately reporting problems to their investors
C. the threat of failure is always good for start-ups, since it helps them maintain their focus
D. investors obtain information about the start-up from no source other than the start-up itself
E. some investors are less concerned with truth about a start-up's management than about the results
Source - Ready4Gmat
Assumption Series
Assumption Series
04 Feb 2020, 09:09
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Venture capital firms pump millions of dollars each year into a variety of start-up companies, expecting most to fail but a few to give astronomical returns. However, optimism and positivity are keys to success in the start-up industry; no start-up wants to admit that it is on its way towards failure. Therefore, venture capital firms remain uncertain about the status of a majority of their investments.
The conclusion drawn above is based on the assumption that
The required assumption of the conclusion to hold is that the start-ups are not reporting properly about their performance. VC are not able to find out how start-up investment is doing from other sources so VC remain uncertain about the status of their investment.
A. most start-ups have a transparent management hierarchy - Is this required assumption, We can use Assumption Negation technique to see Most start-ups do not have a transparent mgmt hierarchy, Does this weakens the conclusion, No if VCs can find on their own how their investments are performing.
B. start-ups should be rewarded for accurately reporting problems to their investors - again, this is not a required assumption for the conclusion to hold.
C. the threat of failure is always good for start-ups, since it helps them maintain their focus - this is again irrelevant for the conclusion.
D. investors obtain information about the start-up from no source other than the start-up itself _ Yes, this must be the assumption we need to conclude that the VC firms remain uncertain about the status of their investment since start-ups have a bias in their reporting. D is the answer.
E. some investors are less concerned with truth about a start-up's management than about the results - No, VCs are concerned or not is not a required assumption for the conclusion to hold.
So D is the answer.
The conclusion drawn above is based on the assumption that
The required assumption of the conclusion to hold is that the start-ups are not reporting properly about their performance. VC are not able to find out how start-up investment is doing from other sources so VC remain uncertain about the status of their investment.
A. most start-ups have a transparent management hierarchy - Is this required assumption, We can use Assumption Negation technique to see Most start-ups do not have a transparent mgmt hierarchy, Does this weakens the conclusion, No if VCs can find on their own how their investments are performing.
B. start-ups should be rewarded for accurately reporting problems to their investors - again, this is not a required assumption for the conclusion to hold.
C. the threat of failure is always good for start-ups, since it helps them maintain their focus - this is again irrelevant for the conclusion.
D. investors obtain information about the start-up from no source other than the start-up itself _ Yes, this must be the assumption we need to conclude that the VC firms remain uncertain about the status of their investment since start-ups have a bias in their reporting. D is the answer.
E. some investors are less concerned with truth about a start-up's management than about the results - No, VCs are concerned or not is not a required assumption for the conclusion to hold.
So D is the answer.
04 Feb 2020, 22:41
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Venture capital firms pump millions of dollars each year into a variety of start-up companies, expecting most to fail but a few to give astronomical returns. However, optimism and positivity are keys to success in the start-up industry; no start-up wants to admit that it is on its way towards failure. Therefore, venture capital firms remain uncertain about the status of a majority of their investments.
The conclusion drawn above is based on the assumption that
A. most start-ups have a transparent management hierarchy
If this assumption does not hold it does not weaken the conclusion. If the management hierarchy is intransparent the investors are still uncertain about the status of their investments
B. start-ups should be rewarded for accurately reporting problems to their investors
If this assumption does not hold it does not weaken the conclusion. If the start-ups are rewarded the incentive would have to be bigger than the investments they might loose by reporting bad figures
C. the threat of failure is always good for start-ups, since it helps them maintain their focus
The investors would still be uncertain, as they do not know the status of their investments for sure
D. investors obtain information about the start-up from no source other than the start-up itself
If this assumption does not hold the investors have a possibility to reduce uncertainty about the certainty of their investments. Thus the conclusion is weakend
E. some investors are less concerned with truth about a start-up's management than about the results
Either way the investors uncertainty won't be reduced.
The conclusion drawn above is based on the assumption that
A. most start-ups have a transparent management hierarchy
If this assumption does not hold it does not weaken the conclusion. If the management hierarchy is intransparent the investors are still uncertain about the status of their investments
B. start-ups should be rewarded for accurately reporting problems to their investors
If this assumption does not hold it does not weaken the conclusion. If the start-ups are rewarded the incentive would have to be bigger than the investments they might loose by reporting bad figures
C. the threat of failure is always good for start-ups, since it helps them maintain their focus
The investors would still be uncertain, as they do not know the status of their investments for sure
D. investors obtain information about the start-up from no source other than the start-up itself
If this assumption does not hold the investors have a possibility to reduce uncertainty about the certainty of their investments. Thus the conclusion is weakend
E. some investors are less concerned with truth about a start-up's management than about the results
Either way the investors uncertainty won't be reduced.
