S&P 500 index

This topic has expert replies
Master | Next Rank: 500 Posts
Posts: 141
Joined: Fri Mar 06, 2009 8:40 am

S&P 500 index

by hmboy17 » Sun May 17, 2009 8:00 pm
S&P 500 index has increased by alomost 13 % over the past 5 years. the avg large-cap mutual fund has lost 3.6 % of it's value over the same time
period. Since index funds are signeficantly less expensive then the avg large-cap mutual fund, the prduent investor will forego placing money in
large-cap mutual fund in favor of better performing index fund.

Argument above is based on -
1. A appeal to common beliefs and values.
2. a distortion od statistical data to benefit a bais.
3. An endeavor to rebut a generalization by using an exceptional case
4. parallel reasoning between past and future
5. a similar argument that uses a cicular reasoning.
Source: — Critical Reasoning |

Junior | Next Rank: 30 Posts
Posts: 19
Joined: Tue May 12, 2009 11:55 pm

Re: S&P 500 index

by Minheequang » Sun May 17, 2009 11:38 pm
Very abstract question, IMO B

S&P 500 index has increased by almost 13 % over the past 5 years. the avg large-cap mutual fund has lost 3.6 % of it's value over the same time
period. Since index funds are significantly less expensive then the avg large-cap mutual fund, the prudent investor will fore-go placing money in
large-cap mutual fund in favor of better performing index fund.

Argument above is based on -
1. A appeal to common beliefs and values -->it's all about statistic, no common beliefs are presented. It's rather a personal belief
2. a distortion old statistical data to benefit a bias -->I think it's the most appropriate choice but it's hard to explain
3. An endeavor to rebut a generalization by using an exceptional case-->no, this is an action based on the implied generalization that funds' index will increase at anytime in the future
4. parallel reasoning between past and future--> not enough clues to make up a parallel reasoning, although it seems to be so
5. a similar argument that uses a circular reasoning -->no circular reasoning here

Legendary Member
Posts: 1035
Joined: Wed Aug 27, 2008 10:56 pm
Thanked: 104 times
Followed by:1 members

by scoobydooby » Mon May 18, 2009 2:39 am
would go for D

it uses past 5 years statistics to predict investor reaction=>assumes past performance will be repeated in the future.

User avatar
Legendary Member
Posts: 575
Joined: Tue Nov 04, 2008 2:58 am
Location: India
Thanked: 18 times
Followed by:4 members
GMAT Score:710

by rahulg83 » Mon May 18, 2009 6:28 am
I second scoobydooby, should be D

OA please?

Legendary Member
Posts: 1799
Joined: Wed Dec 24, 2008 3:03 am
Thanked: 36 times
Followed by:2 members

by goelmohit2002 » Mon May 18, 2009 7:19 am
IMO D...

Believes that history will be repeated.

Master | Next Rank: 500 Posts
Posts: 154
Joined: Thu Mar 19, 2009 12:55 pm
Thanked: 5 times
Followed by:1 members

by vinaynp » Mon May 18, 2009 7:45 am
IMO D.

Master | Next Rank: 500 Posts
Posts: 141
Joined: Fri Mar 06, 2009 8:40 am

by hmboy17 » Mon May 18, 2009 8:02 am
OA is D

Master | Next Rank: 500 Posts
Posts: 100
Joined: Tue Aug 05, 2014 11:28 am

by mason77 » Sun May 15, 2016 2:30 pm
I am pretty sure that the right answer is D.