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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:
35%
(medium)
Question Stats:
70% (02:14) correct
30%
(02:26)
wrong
based on 93
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Angel investors are protected from the legal liabilities of labor violations committed by the startups they invest in. A lawyer argues that this protection is in part why the rate of labor violations in startups is so high, as it negates any motivation on the part of the investor to determine whether the startups manage their employees ethically. If angel investors were more selective, startups would have to display compliance with labor laws to secure capital from them.
Which of the following, if true, most seriously weakens the lawyer's argument?
A. Before angel investors were protected from the legal liabilities incurred by the startups they invest in, there were fewer labor violations in startups than there are now.
B. The liability of an angel investor for labor violations committed by a startup in which the investor has invested depends on the level of involvement the investor has with the startup.
C. Most angel investors are well aware that they are protected from the legal liabilities of labor violations committed by the startups they invest in.
D. There is an upper limit to the amount of involvement an angel investor can have with a startup, while maintaining protection from the legal liabilities of labor violations committed by the startup, but few exceed this limit.
E. When angel investors were not protected from the legal liabilities incurred by the startups they invest in, frequent labor violations occurred in startups as a result of the lack of capital with the startups.
Which of the following, if true, most seriously weakens the lawyer's argument?
A. Before angel investors were protected from the legal liabilities incurred by the startups they invest in, there were fewer labor violations in startups than there are now.
B. The liability of an angel investor for labor violations committed by a startup in which the investor has invested depends on the level of involvement the investor has with the startup.
C. Most angel investors are well aware that they are protected from the legal liabilities of labor violations committed by the startups they invest in.
D. There is an upper limit to the amount of involvement an angel investor can have with a startup, while maintaining protection from the legal liabilities of labor violations committed by the startup, but few exceed this limit.
E. When angel investors were not protected from the legal liabilities incurred by the startups they invest in, frequent labor violations occurred in startups as a result of the lack of capital with the startups.
31 Dec 2025, 01:52
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The passage says that protection given to investors from the legal liabilities of labor violations is the cause of high rate of labor violations, but E states that even before the investors were given this protection, the rate of labor violations was high due to a different reason (lack of capital). So this undermines the lawyer's argument.
So E is correct.
So E is correct.
31 Dec 2025, 08:21
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ExpertsGlobal5
The passage mentions labour violations are being committed by the startups. And the angel investors who invested in these startups are provided legal buffers against such violations.
A lawyer put forth this argument: It’s this legal liability buffer, which allows the angel investor from taking accountability for the labour violations on their employees. The lawyer presses the fact, that as you have invested, the company is yours, and the employees are your employees. So, the lawyer demands some sort of accountability and responsibility from the Angel investors end.
The lawyer concludes, if the angel investors were so selective in where they invest, then labour violations would not occur, as to get funds, they might comply with the labour laws currently prevailing.
We need to weaken the lawyers argument.
A. Before angel investors were protected from the legal liabilities incurred by the startups they invest in, there were fewer labor violations in startups than there are now.
This option is actually a strong strengthening statement. This resonates the view of the passage. Hence, Wrong.
B. The liability of an angel investor for labor violations committed by a startup in which the investor has invested depends on the level of involvement the investor has with the startup.
This explains the practical scenario on the agreements made during the initial funding, the terms and conditions on which the investment is made. Hence, wrong.
C. Most angel investors are well aware that they are protected from the legal liabilities of labor violations committed by the startups they invest in.
This makes a generalised statement, that many are aware of the legal liability buffer that they gain from investing in the startup. Hence, Wrong.
D. There is an upper limit to the amount of involvement an angel investor can have with a startup, while maintaining protection from the legal liabilities of labor violations committed by the startup, but few exceed this limit.
This depends on the case or case basis, and this is solely the government’s prerogative and this is bought into framework by the agreements exchanged between the investor and start ups. Hence, wrong.
E. When angel investors were not protected from the legal liabilities incurred by the startups they invest in, frequent labor violations occurred in startups as a result of the lack of capital with the startups.
This is a 180 degree shift from the lawyers argument, this mentions the quantum of labour violations that might occur from lack of funds in a startup is more compared to the labour violations which occur post angel investing. This legal liability buffer provides the angel investor an incentive to invest in startups. Without them investing, the startup would not actually pick up. Hence a valid weakener.
Option E
