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I’ve not read MGMAT Number props but generally prime numbers are non negative. https://en.wikipedia.org/wiki/Prime_number
As the first statement basically defines a prime number, negative numbers aren’t allowable for this specific question for that statement.
For statement 2 I do not see why a negative shouldn’t be included. So that reinforces the point that it is insufficient.
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If this were a real GMAT question, it would ask "What is the value of positive integer x?", and Statement 1 would say that "x has exactly two positive factors". Factors can certainly be negative; technically 2 has four factors (-2, -1, 1, and 2). The GMAT *never* tests this, however; every real GMAT question about divisibility is always restricted to positive integers only.

(note that as the question in the original post is written, there is no number which satisfies both statements. From Statement 1, x could only be 1 or -1, and neither of these leaves a remainder of zero when divided by 2 - the word 'positive' needs to be included in the question to make it mathematically correct).
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Thanks for prompt explanation. I guess the question needed to have the word "positive," since it is omitted the answer even could be E, although MGMAT Number Properties book says it is C (2)



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