While depressed property values can hurt some large investors, they

Good question! Though I'm not sure that you'll like my answer much.

In most cases, you're right: it seems like a bad idea to use a repeated pronoun to refer to two different antecedents, especially if the repeated pronouns are very close to each other. And in this particular sentence, I think you're right that the pronouns are ambiguous -- and there's obviously a better version in another answer choice.

The trouble is, I think it's dangerous to consider this an absolute rule. Imagine, for example, a long, wordy sentence like this one:

Wilbur ate four dozen burritos on Saturday, mostly because they were relatively small and filled with his favorite ingredient, roasted caterpillars; because they are high and protein and low in fat, caterpillars are considered a delicacy in many parts of the world.

(That might be the most ridiculous sentence I've written this week, though there are a couple of species of caterpillar that truly are tasty...)

Anyway, I'd argue that "they" is perfectly clear in both cases, even though "they" refers to two different antecedents. Technically, there might arguably be some ambiguity here, but it doesn't get in the way of the meaning or clarity of the sentence, and I don't think the GMAT would have a problem with the sentence (other than the content, maybe).

More broadly: pronoun ambiguity isn't an absolute rule, anyway. So you're right to be SUSPICIOUS of repeated pronouns, because they easily could cause ambiguity. But be a little bit careful not to turn it into a rigid rule, because it seems entirely possible that repeated pronouns could correctly refer to different antecedents, depending on the context. And I suspect that if we look hard enough, we'll find a few correct answers on official GMAT questions with "they" (or "it") referring to two different antecedents.

I hope this helps!

This question has repeatedly troubled me. Now that I am seeing it after a break, let me attempt again.

"it" is not the correct pronoun for "properties" so D and E can go.
In C, the position of "they" is quite awkward; "their" has pronoun abiguity.
Between A and B now.
In B as well, "their" has pronoun ambiguity.
A seems good because "they" clearly refers to "depressed property values" and "whose" clearly refers to "homeowners". Conveys the meaning properly.
I will go with A.

Great question! And the answer is that the tendency for a subject pronoun to refer back to the subject of the previous clause isn't really a hard rule. It's just the most logical way for that pronoun to function. For example, "After the neighbor's dogs pee all over my carpet, they seem to taunt me with a victory dance." "They" refers to "neighbor's dogs" because it makes sense for the same subject to have performed both actions, not because I'm blindly applying a grammar rule.

However, watch what happens when I introduce the second clause with an additional plural noun: "After the neighbor's dogs pee all over my carpet, with encouragement from my sociopathic cats, they seem to taunt me with a victory dance." This construction isn't wrong, but it's easy to imagine a reader having to work a little harder to rule out the possibility that "they" now refers to "cats." It just isn't quite as clear as the previous example.

But ultimately, you're right. Even if the antecedent of "they" is little bit less clear in (C) than in (A), we'd prefer to eliminate an answer by using a more concrete error. The more definitive problem with (C) is that "their" seems to refer to "property values" rather than "homeowners." This is illogical.

I hope that helps clarify things!

(B) they can potentially devastate homeowners in that their

Did not understand why B is wrong? I don't think awkward is a good way to eliminate B.

akash7gupta11, have you tried reviewing this post?

Dear GMATGuruNY,

I know that choice B. is wrong for multiple grounds.
However, I wonder whether "in that" is correctly used in choice B.?

(B) they can potentially devastate homeowners in that their

To express a STATE-OF-BEING, we typically use forms of to be:
John IS happy.
Mary WAS happy.
The children HAVE BEEN happy.
This type of verb is known as a linking verb.

Generally, in that serves to modify a preceding linking verb, specifying the way in which the preceding STATE-OF-BEING is true.
Teratomas ARE unusual in that they are composed of tissues such as tooth and bone.
Here, the modifier in green serves to specify the way in which teratomas ARE unusual.

B: they can potentially devastate homeowners in that
Here, in that seems to modify devastate, which is not a linking verb.
For this reason, I would be skeptical of B.

Dear GMATGuruNY,

In light of your reply below, can I view choice B. as B: they can BE potentially devastatING TO homeowners in that

Since BE devastatING is a state-of-being, "in that" in choice B. seems fine right?

No.
A verb that expresses a state-of-being cannot take a direct object.
A verb that takes a direct object expresses an ACTION that is performed upon the direct object.
B: they can potentially devastate homeowners in that
Here, the verb in red has a direct object -- homeowners -- and thus serves to express not a state-of-being but an ACTION.

Dear GMATGuruNY,

It's very crystal clear now

One last quick question, though.

(D) for homeowners, it is potentially devastating in that their

According to your explanation, "in that" in choice D. is correct, right?

In D, the verb is appropriate, but the modifiers in color convey conflicting meanings.
Whereas the blue modifier implies that the state-of-being is POSSIBLE, the red modifier expresses the way in which the state-of-being is TRUE.
Since the two modifiers convey contradictory meanings, this usage of in that does not seem viable.

I had doubt in A/B. A looked good to me, but went for B finalising on parallelism b/w "While X can hurt.., Y ..can devastate..."
Am I correct to think of parallelism b/w comparing clauses (due to use of 'While')??
Pls, explain, I have to take my exam soon. Thanks.

The usage of an introductory while-modifier does not require parallelism.
The primary issue is MEANING.
Generally, an introductory while-clause must serve to express a CONTRAST.
The OA to SC77 in the OG16:
While the cost of running nuclear plants is about the same as for other types of power plants, the fixed costs that stem from building nuclear plants make the electricity they generate more expensive.
Here, the two colored clauses express contrasting ideas, but the blue clause is not parallel with the green clause.

Hi Stormcool,

We generally don't insist on an exact match even with conjunctions like and, but, and or.

They can try it, but they won't succeed.
does not need to be
They can try it, but they can't succeed.

What that means for us in this question is that parallelism is not a problem in either option. We take B out because:
1. In that is not a good fit. (a) It is generally not preferred, and (b) it is a little too specific, because it leads to this meaning: "they can potentially devastate homeowners in the sense that their equity can plunge". The intended meaning is almost certainly more general than that.

2. The their at the end of B is ambiguous: "depressed property values can potentially devastate homeowners in that depressed property values' equity..."

GMATNinja VeritasKarishma Is the use of "can be" and "potentially" in the same sentence redundant? This is the key reason I chose (A) over (B)

On GMAT SC, it is most efficient to first eliminate options based on grammar rules, and only think through wishy-washy factors like redundancy if you can't find a more black-and-white reason to get ride of an answer choice.

The main problem with (B) is the pronouns. (B) uses "they" to refer to property values, and just a bit later uses "their" to refer to "homeowners."

This is much more confusing than the construction in (A), which also uses "they" to refer to property values, but then uses the much clearer noun-modifier "whose" to describe the homeowners.

Is "can potentially" redundant? Perhaps. But the above pronoun issue is a much stronger reason to eliminate (B).

I hope that helps!

I was a bit confused between A and B.

Decided to go with A because potentially already indicates the uncertainty and we don't need can.
(A) they are potentially devastating...
(B) they can potentially devastate...