Prep T2-20

kaijen · Posted: Sat Sep 22, 2007 7:58 pm Post subject: Prep T2-20

Test2-20. (27836-!-item-!-188;#058&003666)

During the past year, Pro-Tect Insurance Company's total payout on car-theft claims has been larger than the company can afford to sustain. Pro-Tect cannot reduce the number of car-theft policies it carries, so it cannot protect itself against continued large payouts that way. Therefore, Pro-Tect has decided to offer a discount to holders of car-theft policies whose cars have antitheft devices. Many policyholders will respond to the discount by installing such devices, since the amount of the discount will within two years typically more than cover the cost of installation. Thus, because cars with antitheft devices are rarely stolen, Pro-Tect's plan is likely to reduce its annual payouts.

In the argument above, the two portions in boldface play which of the following roles?

(A) The first and the second are both evidence offered by the argument as support for its main conclusion.
(B) The first presents a problem a response to which the argument assesses; the second is the judgment reached by that assessment.
(C) The first is the position the argument seeks to establish; the second is a judgment the argument uses to support that position.
(D) The first is a development that the argument seeks to explain; the second is a prediction the argument makes in support of the explanation it offers.
(E) The first presents a development whose likely outcome is at issue in the argument; the second is a judgment the argument uses in support of its conclusion about that outcome.

Ans: (B)

Pro-Tect cannot reduce the number of car-theft policies it carries, so it cannot protect itself against continued large payouts that way.

What does"that way" refer to?
car-theft claims has been larger than the company can afford to sustain?
or
reduce the number of car-theft policies it carries?

thx

Guest · Posted: Wed Oct 10, 2007 3:23 pm Post subject:

Pro-Tect cannot do X, so it cannot protect itself against Y that way

that way refers to X- the option of reducing the number of car theft policies