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05 May 2022, 01:30
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E
Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
5%
(low)
Question Stats:
93% (01:41) correct
7%
(02:01)
wrong
based on 148
sessions
History
Date
Time
Result
Not Attempted Yet
The decline in the price of biotech stocks has hurt many institutions that had invested heavily in biotech companies. Last year the state university added 200,000 shares of a biotech stock to its holdings. The stock in question has declined in value by more than 90 percent over the last 12 months. The college, however, did not purchase the stock, but received it as a gift. Therefore, the price decline will not harm the university’s finances.
Which of the following, if true, casts the most doubt on the conclusion that the price decline of biotech stocks will not harm the university’s finances?
A. The biotech sector is volatile; some stocks that lose 90 percent of their value in one year may regain all of their value and more in the following year.
B. The university needs to pay capital gains taxes only on a stock sale that results in a gain; stocks sold at a loss will incur no tax penalty.
C. Although the biotech sector is down, the overall health-care sector, in which the university has invested heavily, is up for the year.
D. The biotech company in question has a promising new drug in development that could revolutionize the treatment of type II diabetes.
E. The university began construction of a new laboratory last year that the provost had expected to pay for with the proceeds from the sale of the biotech stock in question.
Which of the following, if true, casts the most doubt on the conclusion that the price decline of biotech stocks will not harm the university’s finances?
A. The biotech sector is volatile; some stocks that lose 90 percent of their value in one year may regain all of their value and more in the following year.
B. The university needs to pay capital gains taxes only on a stock sale that results in a gain; stocks sold at a loss will incur no tax penalty.
C. Although the biotech sector is down, the overall health-care sector, in which the university has invested heavily, is up for the year.
D. The biotech company in question has a promising new drug in development that could revolutionize the treatment of type II diabetes.
E. The university began construction of a new laboratory last year that the provost had expected to pay for with the proceeds from the sale of the biotech stock in question.
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05 May 2022, 04:03
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(E). It took me 01:25.
We need an answer choice that shows that the price drop in the share price of the biotech stock will lead to financial loss for the university.
(E) brings in that information that shows that the university had planned to pay for the construction of the new building through the sale of biotech shares, now if the value of the stocks is not same anymore and has rather reduced. The University will have to bear the burden of the difference in stock value before and now. This is a financial set back that the university will face.
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We need an answer choice that shows that the price drop in the share price of the biotech stock will lead to financial loss for the university.
(E) brings in that information that shows that the university had planned to pay for the construction of the new building through the sale of biotech shares, now if the value of the stocks is not same anymore and has rather reduced. The University will have to bear the burden of the difference in stock value before and now. This is a financial set back that the university will face.
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05 May 2022, 22:33
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IMO E
Question Stem: Which of the following, if true, casts the most doubt on the conclusion
Conclusion: the price decline will not harm the university’s finances.
Pre Thinking: we need to find an option that challenges the conclusion and indicates that loss in the share value might hurt the university finances in some way.
Option E: indicates that payment was planned based on the expected increase value of the stock. Hence, this doubt the conclusion.
Question Stem: Which of the following, if true, casts the most doubt on the conclusion
Conclusion: the price decline will not harm the university’s finances.
Pre Thinking: we need to find an option that challenges the conclusion and indicates that loss in the share value might hurt the university finances in some way.
Option E: indicates that payment was planned based on the expected increase value of the stock. Hence, this doubt the conclusion.
