PrepTest 109, Section 3, Question 8
Most people invest in the stock market without(67 more words not shown)
If the statements in the(12 more words not shown)
- ASome people who(19 more words not shown)
- BMost people who(18 more words not shown)
- CSome people who(24 more words not shown)
- DMost people who(15 more words not shown)
- EMost people who(16 more words not shown)
Reading the argument
Doing no research of your own doesn't necessarily mean choosing at random. Someone could follow a broker's advice. Someone else might buy because a company simply feels promising. The passage distinguishes those investors from people who sometimes research and the few who always do.
Then we learn that a majority make a profit. Put that beside the first statement: a majority do no research of their own. Those two majorities have to overlap. There isn't room for more than half the investors to be in one group and more than half in a completely separate group.
For example, imagine one hundred investors, with sixty doing no research and sixty making a profit. Even if all forty researchers made a profit, twenty of the profitable investors would still have to come from the no-research group. The actual percentages needn't be sixty; the point is that both groups exceed half of the same total.
What we’re looking for
The must-be-true question should let us connect those facts. I'd predict that some people make a profit without doing their own research. That doesn't show which strategy is best or how well any particular subgroup does. It shows that personal research isn't required for every profitable investor.
Working the answers
- ACorrect
The two majority groups must share some members. Those investors both make a profit and do no research of their own. If every profitable investor did their own research, the profitable group would have to fit entirely within the minority who research. It cannot do that, because the profitable group is a majority.
- B
The passage gives us some non-researchers who rely solely on brokers and some others who rely on hunches. It doesn't say those two groups include every non-researcher, or that together they make up most investors. Knowing that most people do no research doesn't let us replace that entire category with two examples drawn from it.
- C
We don't know whether anyone in this particular middle group makes a profit. The profitable majority could come from other investors, while everyone who alternates between research and outside advice or hunches loses money. Only the two groups described as majorities are forced to overlap; this smaller group has no comparable guarantee.
- D
We can establish some overlap, not that most non-researchers profit. Return to the hundred-person example: forty researchers and twenty non-researchers could make a profit. Most investors would profit, and most would do no research, yet only twenty of the sixty non-researchers would profit. D demands more than our two majority facts establish.
- E
This narrows the claim to people who rely solely on brokers. We don't know the success rate within that group. The overall majority could make a profit even if most broker-only investors lost money. An overall result doesn't automatically give every subgroup the same result.
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