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minority business

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rahulg83 GMAT Destroyer!
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minority business Post Wed Jun 24, 2009 12:09 pm
Elapsed Time: 00:00
  • Lap #[LAPCOUNT] ([LAPTIME])
    In contrast to traditional analyses of minority busi-
    ness, the sociological analysis contends that minority
    business ownership is a group-level phenomenon, in that
    it is largely dependent upon social-group resources for
    (5) its development. Specifically, this analysis indicates that
    support networks play a critical role in starting and
    maintaining minority business enterprises by providing
    owners with a range of assistance, from the informal
    encouragement of family members and friends to
    (10) dependable sources of labor and clientele from the
    owner's ethnic group. Such self-help networks, which
    encourage and support ethnic minority entrepreneurs,
    consist of "primary" institutions, those closest to the
    individual in shaping his or her behavior and beliefs.
    (15) They are characterized by the face-to-face association
    and cooperation of persons united by ties of mutual
    concern. They form an intermediate social level between
    the individual and larger "secondary " institutions based
    on impersonal relationships. Primary institutions
    (20) comprising the support network include kinship, peer,
    and neighborhood or community subgroups.
    A major function of self-help networks is financial
    support. Most scholars agree that minority business
    owners have depended primarily on family funds and
    (25) ethnic community resources for investment capital .
    Personal savings have been accumulated, often through
    frugal living habits that require sacrifices by the entire
    family and are thus a product of long-term family finan-
    cial behavior. Additional loans and gifts from relatives.
    (30) forthcoming because of group obligation rather than
    narrow investment calculation, have supplemented
    personal savings. Individual entrepreneurs do not neces-
    sarily rely on their kin because they cannot obtain finan-
    cial backing from commercial resources. They may actu-
    (35) ally avoid banks because they assume that commercial
    institutions either cannot comprehend the special needs
    of minority enterprise or charge unreasonably high
    interest rates.
    Within the larger ethnic community, rotating credit
    (40) associations have been used to raise capital. These asso-
    ciations are informal clubs of friends and other trusted
    members of the ethnic group who make regular contri-
    butions to a fund that is given to each contributor in
    rotation. One author estimates that 40 percent of New
    (45)York Chinatown firms established during 1900-1950
    utilized such associations as their initial source of
    capital. However, recent immigrants and third or fourth
    generations of older groups now employ rotating credit
    associations only occasionally to raise investment funds.
    (50) Some groups, like Black Americans, found other means
    of financial support for their entrepreneurial efforts.The
    first Black-operated banks were created in the late nine-
    teenth century as depositories for dues collected from
    fraternal or lodge groups, which themselves had sprung
    (55) from Black churches. Black banks made limited invest-
    ments in other Black enterprises. Irish immigrants in
    American cities organized many building and loan asso-
    ciations to provide capital for home construction and
    purchase. They. in turn, provided work for many Irish
    (60) home-building contractor firms. Other ethnic and
    minority groups followed similar practices in founding
    ethnic-directed financial institutions.


    1. Based on the information in the passage. it would be
    LEAST likely for which of the following persons to be
    part of a self-help network?
    (A) The entrepreneur's childhood friend
    (B) The entrepreneur's aunt
    (C) The entrepreneur's religious leader
    (D) The entrepreneur's neighbor
    (E) The entrepreneur's banker

    2. Which of the following illustrates the working of a self-
    help support network, as such networks are described
    in the passage?
    (A) A public high school offers courses in book-keeping
    and accounting as part of its open-enrollment adult
    education program.
    (B) The local government in a small city sets up a
    program that helps teen-agers find summer jobs.
    (C) A major commercial bank offers low-interest loans
    to experienced individuals who hope to establish
    their own businesses.
    (D) A neighborhood-based fraternal organization
    develops a program of on-the-job training for its
    members and their friends.
    (E) A community college offers country residents
    training programs that can lead to certification in a
    variety of technical trades.

    3. Which of the following can be inferred from the passage
    about rotating credit associations?
    (A) They were developed exclusively by Chinese
    immigrants.
    (B) They accounted for a significant portion of the
    investment capital used by Chinese immigrants in
    New York in the early twentieth century.
    (C) Third-generation members of an immigrant group
    who started businesses in the 1920's would have
    been unlikely to rely on them.
    (D) They were frequently joint endeavors by members
    of two or three different ethnic groups.
    (E) Recent immigrants still frequently turn to rotating
    credit associations instead of banks for investment
    capital.

    4. The passage best supports which of the following
    statements?
    (A) A minority entrepreneur who had no assistance from
    family members would not be able to start a
    business.
    (B) Self-help networks have been effective in helping
    entrepreneurs primarily in the last 50 years.
    (C) Minority groups have developed a range of
    alternatives to standard financing of business
    ventures.
    (D) The financial institutions founded by various ethnic
    groups owe their success to their unique formal
    organization.
    (E) Successful minority-owned businesses succeed
    primarily because of the personal strengths of their
    founders.

    5. Which of the following best describes the organization
    of the second paragraph?
    (A) An argument is delineated, followed by a
    counterargument.
    (B) An assertion is made and several examples are
    provided to illustrate it.
    (C) A situation is described and its historical
    background is then outlined.
    (D) An example of a phenomenon is given and is then
    used as a basis for general conclusions.
    (E) A group of parallel incidents is described and the
    distinctions among the incidents are then clarified.

    6. According to the passage, once a minority-owned
    business is established, self-help networks contribute
    which of the following to that business?
    (A) Information regarding possible expansion of the
    business into nearby communities
    (B) Encouragement of a business climate that is nearly
    free of direct competition
    (C) Opportunities for the business owner to reinvest
    profits in other minority-owned businesses
    (D) Contact with people who are likely to be customers
    of the new business
    (E) Contact with minority entrepreneurs who are
    members of other ethnic groups

    7. It can be inferred from the passage that traditional
    analyses of minority business would be LEAST likely
    to do which of the following?
    (A) Examine businesses primarily in their social
    contexts
    (B) Focus on current, rather than historical, examples
    of business enterprises
    (C) Stress common experiences of individual
    entrepreneurs in starting businesses
    (D) Focus on the maintenance of businesses, rather
    than means of starting them
    (E) Focus on the role of individual entrepreneurs in
    starting a business

    8. Which of the following can be inferred from the
    passage about the Irish building and loan
    associations mentioned in the last paragraph?
    (A) They were started by third-or fourth-generation
    immigrants.
    (B) They originated as offshoots of church-related
    groups.
    (C) They frequently helped Irish entrepreneurs to
    finance business not connected with construction.
    (D) They contributed to the employment of many Irish
    construction workers.
    (E) They provided assistance for construction businesses
    owned by members of other ethnic groups.



    My doubts are in 5th and 6th question..I marked A and B respectively

    OA's are E D B C B D A D

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    Post Thu Jun 25, 2009 3:53 am
    For answering question 5 just look at the beginning of this passage which states ....

    "the sociological analysis contends that minority
    business ownership is a group-level phenomenon, in that
    it is largely dependent upon social-group resources for its development."


    The second paragraph exemplifies this by stating that how credit required for business is raised by informal club of friends who make regular contribution and these contribution are used by others in rotation .

    So this is again a group level phenomenon as stated in the beginning of the passage ........

    Similarly the black - operated bank also is a group level phenomenon because the fund of these bank came from dues collected from
    fraternal or lodge groups, which themselves had sprung
    from Black churches .

    So here again black - operated bank exemplifies group- level phenomenon .

    Therefore we can be sure that the option B which states - An assertion is made and several examples are provided to illustrate it is the correct choice .

    There is a small trap in the question - it asks you to refer to the second paragraph but the basic assertion that is being made lies in the first paragraph- the group - level phenomenon .

    These types of question where the reference is made to some specific lines and the answer can be found by using not only those lines but also some other lines are the most difficult category of question , as much as I know . Beware of this trap .

    For question number 6 ......

    Read these lines ...

    " Specifically, this analysis indicates that
    support networks play a critical role in starting and
    maintaining minority business enterprises by providing
    owners with a range of assistance, from the informal
    encouragement of family members and friends to
    dependable sources of labor and clientele from the
    owner's ethnic group."



    I have purposefully put the word " clientele from the
    owner's ethnic group " in bold .

    Praprashe this sentence and you will get the answer which is - self-help networks contribute by providing Contact with people who are likely to be customersof the new business

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    adi_800 GMAT Destroyer! Default Avatar
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    Post Wed Jul 28, 2010 9:00 pm
    Why the answer to the 3rd question is B and not C
    I think both can be inferred.

    Arora...can you check it..
    If you dont wanna read the entire passage, just focus on lines 39 to 50..
    Rest of the passage can be ignored...

    paddle_sweep GMAT Destroyer! Default Avatar
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    Post Sat Jul 31, 2010 11:16 pm
    My question is with respect to questions 6 & 7. How do we identify the correct answer for these two questions?

    Cheers

    nitya mithal Just gettin' started! Default Avatar
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    Post Sun Aug 29, 2010 8:02 am
    For the 7th question read the first 1 line.....In contrast to traditional analyses of minority business,
    the sociological analysis contends that minority
    business ownership is a group-level phenomenon, in that
    it is largely dependent upon social-group resources for
    (5) its development.

    This will help you....
    But I donot understand the 5th question.Can anybody help me in that?

    nitya mithal Just gettin' started! Default Avatar
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    Post Sun Aug 29, 2010 8:09 am
    Sorry I wanted to ask about the 4th question...Having difficulty in understanding it

    saketk GMAT Destroyer! Default Avatar
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    Post Wed Oct 19, 2011 11:13 pm
    nitya mithal wrote:
    Sorry I wanted to ask about the 4th question...Having difficulty in understanding it
    Quote:
    4. The passage best supports which of the following
    statements?
    (A) A minority entrepreneur who had no assistance from
    family members would not be able to start a
    business.
    (B) Self-help networks have been effective in helping
    entrepreneurs primarily in the last 50 years.
    (C) Minority groups have developed a range of
    alternatives to standard financing of business
    ventures.
    (D) The financial institutions founded by various ethnic
    groups owe their success to their unique formal
    organization.
    (E) Successful minority-owned businesses succeed
    primarily because of the personal strengths of their
    founders.
    This is basically a inference question -- if you read the para 1 then you will find few lines stating that the members of the business do not turn to banks due to following reasons --

    Quote:
    Individual entrepreneurs do not neces-
    sarily rely on their kin because they cannot obtain finan-
    cial backing from commercial resources. They may actu-
    (35) ally avoid banks because they assume that commercial
    institutions either cannot comprehend the special needs
    of minority enterprise or charge unreasonably high
    interest rates.
    So, the minority groups have developed other resources to finance their business ventures. This is what option C in question 4 is saying.

    hth.

    PS: I got 7th question wrong. I selected D. can someone please explain that to me?

    As per the OA - the minority business would actually focus on the maintenance of businesses, rather than means of starting them? And all along i was thinking that they are focused towards starting new businesses by the help of close relatives, friends etc.

    GMAT/MBA Expert

    Post Wed Oct 19, 2011 11:51 pm
    I received a PM about Q7.

    Quote:
    It can be inferred from the passage that traditional analyses of minority business would be LEAST likely
    to do which of the following?
    Strategy:
    FIND THE WINDOW: the 5-10 lines in the passage that discuss TRADITIONAL ANALYSES.
    PARAPHRASE: In your own words, answer the question.

    The WINDOW is in the beginning of the passage:
    In contrast to traditional analyses of minority business, the sociological analysis contends that minority business ownership is a group-level phenomenon, in that it is largely dependent upon social-group resources for its development.

    PARAPHRASE:
    Since traditional analyses DO NOT contend that minority business ownership is a group-level phenomenon, they would be LEAST likely to focus on SOCIAL-GROUP RESOURCES.

    Answer choice A describes what traditional analyses would be LEAST likely to do:
    Examine businesses primarily in their social contexts.

    The correct answer is A.

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    saketk GMAT Destroyer! Default Avatar
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    Post Thu Oct 20, 2011 12:20 am
    Thanks Mitch for the explanation.

    sujamait Just gettin' started! Default Avatar
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    Post Thu Oct 27, 2011 5:32 am
    Can anyone explain Q 5,6,7 briefly ? Thanks.

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    Post Mon Feb 20, 2012 3:58 am
    Hi Sujamait,

    The explanations to your questions are:


    5. Which of the following best describes the organization
    of the second paragraph?
    USE POE

    (A) An argument is delineated, followed by a
    counterargument. This is clearly not the case.
    (B) An assertion is made and several examples are
    provided to illustrate it. Yes, assertion is made and examples of different communities are given.
    (C) A situation is described and its historical
    background is then outlined. Not examples except China town has been supported with historical data.
    (D) An example of a phenomenon is given and is then
    used as a basis for general conclusions. First statement of 2nd Para is not an example.Examples are given later in the para.
    (E) A group of parallel incidents is described and the
    distinctions among the incidents are then clarified. There are no parallel incidents described that took at same time or so.

    6. According to the passage, once a minority-owned
    business is established, self-help networks contribute
    which of the following to that business?
    (A) Information regarding possible expansion of the
    business into nearby communities. "Near by community" is not discussed any where.
    (B) Encouragement of a business climate that is nearly
    free of direct competition. No description of competition is there in both paras.
    (C) Opportunities for the business owner to reinvest
    profits in other minority-owned businesses. Nothing is discussed about investment into other. Major discussion is funding for ones own business.
    (D) Contact with people who are likely to be customers
    of the new business. The 1st para clearly brings out this.
    (E) Contact with minority entrepreneurs who are
    members of other ethnic groups. "Other ethinic group" is incorrect.

    7. It can be inferred from the passage that traditional
    analyses of minority business would be LEAST likely
    to do which of the following?
    (A) Examine businesses primarily in their social
    contexts. The is done by Sociological Analysis and Traditions does not do the same way as it is clearly brought out in 1st and 2nd line of 1st Para. So this is clearly be the answer.
    (B) Focus on current, rather than historical, examples
    of business enterprises
    (C) Stress common experiences of individual
    entrepreneurs in starting businesses
    (D) Focus on the maintenance of businesses, rather
    than means of starting them
    (E) Focus on the role of individual entrepreneurs in
    starting a business

    8. Which of the following can be inferred from the
    passage about the Irish building and loan
    associations mentioned in the last paragraph?
    (A) They were started by third-or fourth-generation
    immigrants. There is some mention for this for chinese and not Irish.
    (B) They originated as offshoots of church-related
    groups. This is mentioned for blacks not Irish.
    (C) They frequently helped Irish entrepreneurs to
    finance business not connected with construction. For Irish the 2nd para mentions only for construction business and not anything else.
    (D) They contributed to the employment of many Irish
    construction workers. Yes, this had be brought out clearly by saying job opportunities for Iris contractors increases.
    (E) They provided assistance for construction businesses
    owned by members of other ethnic groups. No, not for other ethnic group .. by Irish for Iris contractor

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    Post Mon Apr 29, 2013 4:58 am
    Hello. Could you please explain the answer for Q3 & Q4

    Thanks

    GMATGuruNY wrote:
    I received a PM about Q7.

    Quote:
    It can be inferred from the passage that traditional analyses of minority business would be LEAST likely
    to do which of the following?
    Strategy:
    FIND THE WINDOW: the 5-10 lines in the passage that discuss TRADITIONAL ANALYSES.
    PARAPHRASE: In your own words, answer the question.

    The WINDOW is in the beginning of the passage:
    In contrast to traditional analyses of minority business, the sociological analysis contends that minority business ownership is a group-level phenomenon, in that it is largely dependent upon social-group resources for its development.

    PARAPHRASE:
    Since traditional analyses DO NOT contend that minority business ownership is a group-level phenomenon, they would be LEAST likely to focus on SOCIAL-GROUP RESOURCES.

    Answer choice A describes what traditional analyses would be LEAST likely to do:
    Examine businesses primarily in their social contexts.

    The correct answer is A.

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