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assumption question

by paes » Fri Jun 25, 2010 10:02 pm
Graduate schools have begun to check whether applicants for admission are in default on government-guaranteed student loans. Any application submitted by an applicant who fails this test is not processed. Though all applications are tested, it is thought that the 3 percent of the applications that fail represent only three-quarters of the incoming applications from individuals in default. Consequently, approximately 1 percent of the applications that are processed are those of applicants in default who remain undetected.

Which of the following is an assumption in the argument above?


a) Before being processed, the applications from individuals in default on their government-guaranteed student loans are not rejected for other reasons.

b) Applicants in default on their government-guaranteed student loans will not make any loan payments in the future.

c) In all likelihood, more than 3 percent of the applications actually fail the default test.

d) Only a small fraction of the individuals in default on their government-guaranteed student loans apply to graduate school.

e) Individuals in default on their government-guaranteed student loans apply to graduate school in the same numbers in which they do not apply to graduate school.

[spoiler]OA Later
Please provide explanation [/spoiler]
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Source: — Critical Reasoning |
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by kvcpk » Fri Jun 25, 2010 10:25 pm
IMO A.

This is the only statement I believe connects the stimulus..
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by Shawshank » Fri Jun 25, 2010 11:56 pm
IMO -- A
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by paes » Sat Jun 26, 2010 12:02 am
OA is A.
Please provide the explanation for A.
I am unable to understand the problem.
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by dkumar.83 » Sun Jun 27, 2010 9:19 am
I'll go with A, although i feel that there is some error in the question.
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by ayushiiitm » Sun Jun 27, 2010 10:06 am
@paes

Can u cite the source of the problem. The language seems ambiguous.I had to read it 5 times to understand (that too not in a comfortable manner)

If its not from a authentic source, no need to put in hard efforts. It will only ruin your concepts
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by paes » Sun Jun 27, 2010 10:53 pm
Source : Princeton test-2

So I assume it as a reliable source.
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by sumanr84 » Mon Jun 28, 2010 3:46 am
I am not able to get head and tail of this argument.
I am on a break !!
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by paes » Mon Jun 28, 2010 4:37 am
sumanr84 wrote:I am not able to get head and tail of this argument.
I was in same situation while giving the test :)
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by albatross86 » Mon Jun 28, 2010 5:05 am
Fact 1: GS have started checking if students are in default of loans.
Fact 2: All apps are tested, and if it is found they are in default, the app won't be processed.
Fact 3: 3% of total apps = The ones that fail the test = Only 3/4 incoming apps from defaulting students.

Conclusion: 1% of processed apps = Undetected defaults.

What is the ASSUMPTION?

Let us summarize the main point. eg Out of 1000 applicants, 3% of them i.e. 30 are found to be defaulters. But in reality, 40 of them were defaulters. So only 3/4 of the actual defaulters were caught.

From this the author is concluding that 1%, i.e. 10 of them were undetected.

Now what if these 10 fellows who we are assuming are going scot-free were caught for something else, before this test was even conducted on their application?

Say the application process is like this:

Step 1: Does the applicant have a criminal record? If YES - Do not process app.
Step 2: Is he a loan defaulter? If YES - Do not process app.

What if those 10 defaulters were rejected at Step 1? Thus, they were never tested in Step 2, and we cannot conclude that they were undetected.

This is clearly stated in choice A.

To eliminate other choices, perform negation test:

B. Even if they make loan payments in the future, it doesn't change the fact that they are in default presently. We don't care about the future since it is uncertain and irrelevant to the argument.

C. This is not an assumption required at all. At the most the author is assuming that the 3% statistic is accurate, not that it is actually more than 3%.

D. We don't care about the defaulters who did not apply, only those that did.

E. Same reason as D.

Pick A.

Tough question!
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by paes » Mon Jun 28, 2010 5:34 am
thanks albatross

But I can't solve this question on exam day.
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