BREAKING: Target Test Prep releases Brand New 2026 On Demand GMAT prep course

Redeem

Factorial Mutual Fund

This topic has expert replies
Post new topic Post Reply
Previous Topic Next Topic
Master | Next Rank: 500 Posts
Posts: 313
Joined: Tue Oct 13, 2015 7:01 am
Thanked: 2 times

Factorial Mutual Fund

by jain2016 » Tue Apr 05, 2016 9:08 am
Advertisement: Last year, Factorial Mutual Fund continued its strong record of investment performance. Investors who included Factorial Fund in their portfolios realized an average capital gain of 15% across all of their investment assets, nearly double the market return. Therefore, investors interested in high returns should consider adding Factorial Mutual Fund to their portfolios.

The claim in the advertisement above is based on which of the following assumptions?

A) Factorial Fund is one of the oldest and largest mutual funds in the investment industry.

B) A substantial part of the 15% portfolio appreciation was attributable to the returns of Factorial Fund and this level of fund's performance is likely to persist in the future.

C) Last year, Factorial Fund outperformed all other funds with similar style and investment objectives.

D) The Fund is suitable to all investors.

E) The fees charged by Factorial Fund are among the lowest in the investment industry.

OAB

Hi Experts ,

Please explain what is wrong with option D

Thanks,

SJ
Top
Source: — Critical Reasoning |
User avatar
Legendary Member
Posts: 2663
Joined: Wed Jan 14, 2015 8:25 am
Location: Boston, MA
Thanked: 1153 times
Followed by:128 members
GMAT Score:770

by DavidG@VeritasPrep » Tue Apr 05, 2016 9:23 am
jain2016 wrote:Advertisement: Last year, Factorial Mutual Fund continued its strong record of investment performance. Investors who included Factorial Fund in their portfolios realized an average capital gain of 15% across all of their investment assets, nearly double the market return. Therefore, investors interested in high returns should consider adding Factorial Mutual Fund to their portfolios.

The claim in the advertisement above is based on which of the following assumptions?

A) Factorial Fund is one of the oldest and largest mutual funds in the investment industry.

B) A substantial part of the 15% portfolio appreciation was attributable to the returns of Factorial Fund and this level of fund's performance is likely to persist in the future.

C) Last year, Factorial Fund outperformed all other funds with similar style and investment objectives.

D) The Fund is suitable to all investors.

E) The fees charged by Factorial Fund are among the lowest in the investment industry.

OAB

Hi Experts ,

Please explain what is wrong with option D

Thanks,

SJ
Ask yourself: can we really assume that the fund is suitable for all investors? If it were suitable for, say, 98% of investors, wouldn't the argument still hold?

Put another way, if we were to negate the answer choice: The fund is not suitable for all investors, it wouldn't destroy the argument, as a fund that had superior returns, but wasn't appropriate for every single investor on earth, is one that is still worth considering. Because the negation of the correct answer should destroy the argument, D cannot be correct.
Veritas Prep | GMAT Instructor

Veritas Prep Reviews
Save $100 off any live Veritas Prep GMAT Course
Top
Master | Next Rank: 500 Posts
Posts: 313
Joined: Tue Oct 13, 2015 7:01 am
Thanked: 2 times

by jain2016 » Tue Apr 05, 2016 9:31 pm
Hi David ,

Thanks for your reply sir. I got it now.

Thanks,

SJ
Top
Post new topic Post Reply
• Page 1 of 1