PrepTest 148, Section 2, Question 19
Passage A Insider-trading law makes it a crime(495 more words not shown)
Passage A(282 more words not shown)
Passage B(221 more words not shown)
The passages' references to the(32 more words not shown)
- APassage A presents(25 more words not shown)
- BPassage A uses(36 more words not shown)
- CPassage A presents(28 more words not shown)
- DPassage A presents(20 more words not shown)
- EPassage A treats(26 more words not shown)
Reading the passage
Both references approve analyzing stock information and making informed decisions. But agreement about the activity isn't the whole relationship we're being asked to explain. What job does that activity perform in each argument?
What we’re looking for
A uses it as a comparison: ordinary analysis and insider trading both let someone profit from knowledge others lack. B uses it as a contrast: skill with shared information is fair competition, while privileged access to information is not.
Working the answers
- A
A doesn't call analysis unnecessary. It praises the investor who does that homework. Nor does A assume prices already contain all relevant information; informed trading helps them move toward a more accurate assessment.
- B
A isn't presenting analysis as a remedy for a lack of transparency. It is comparing an accepted informational advantage with insider trading. B values analysis under transparent conditions, but the cited statement doesn't establish that analysis itself becomes unworkable without transparency. Those claims miss the comparison and contrast doing the work here.
- C
A treats the advantage from analysis as legitimate, not unfair. This reverses A's use of the example.
- DCorrect
A presents ordinary analysis as comparable to insider information: both can give an investor useful knowledge. B distinguishes the two: superior analysis of shared facts is acceptable, but trading on facts others cannot access unfairly compromises the market.
- E
A mentions stockbrokers but doesn't limit analysis to professionals. The hypothetical investor who studies an overpriced stock need not belong to that group. There is no professionals-versus-ordinary-investors contrast.
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