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Investment analyst

by atulmangal » Thu May 19, 2011 7:34 am
Investment analyst: The CEO of the diamond mining company is telling investors that the discovery of a new deposit of diamonds proves that previous concerns regarding the depletion of the company's mines were unfounded. This argument is deceptive, however; like the oil company that had to file for bankruptcy last year after quickly exhausting its newest oil reservoir, the diamond company has merely postponed its troubles, not solved them, by discovering this new deposit.

The analyst's statements, if true, most strongly support which of the following conclusions?


(A) The diamond company will likely file for bankruptcy by the end of this year.

(B) The rate at which diamonds can be mined from a deposit is similar to the rate at which oil can be extracted from a reservoir.

(C) There are techniques for assessing accurately the number of diamond deposits not yet extracted from a mine.

(D) Investors should continue to be concerned that the diamond company's mines are becoming depleted.

(E) The diamond company's troubles involve more than just the depletion of its mines.
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by Frankenstein » Thu May 19, 2011 8:28 am
Hi,
I am going for option 'D' because he says that the troubles are just postponed but not solved.
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by abhijit_ghonge » Thu May 19, 2011 8:35 pm
I go with 'D' as answer since as in the case of oil company which just postponed its troubles and went bankrupt, so is with the Diamond company.
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by atulmangal » Thu May 19, 2011 8:47 pm
Thanks guys

OA is D only
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by karthikpandian19 » Wed Jun 27, 2012 11:15 pm
In this passage, a diamond company's CEO claims that the discovery of a new diamond deposit proves that the company's mines are not becoming depleted. An investment analyst argues against this claim, comparing the diamond company to an oil company that found a new reservoir, extracted the oil, and then went bankrupt.

We are asked to use the analyst's statements to draw a conclusion. The analyst concludes that the diamond company will experience problems at some point in the future, so the answer will likely relate to this.

Choice D claims that investors should continue to worry about the depletion of the company's mines. The analyst argues that despite the discovery of the new deposit, the company's mines might run out of diamonds; we can infer from this conclusion that investors should continue to be worried about this depletion. Choice D is correct.

Choice A claims that the company is likely to file for bankruptcy. This is too extreme; while the analyst compares the diamond company to an oil company that went bankrupt, the analyst doesn't predict any particular "likely" financial outcome for the diamond company. The analyst predicts a postponement of "troubles."

Choice B mentions that diamonds can be mined and oil can be extracted at similar rates. However, the analyst doesn't suggest that the diamond company will exhaust this deposit as quickly as the oil company exhausted its reservoir, just with a general similarity in the paths that the companies are taking.

Choice C tells us that there are ways to determine accurately how many diamonds are left in a mine. However, this is contradicted by the uncertainty expressed in the passage regarding the number of diamonds remaining in the mines.

Choice E states that the diamond company has other problems in addition to the possible depletion of its mines. However, the passage focuses on this particular problem, and the analyst never mentions any other specific problem.
atulmangal wrote:Investment analyst: The CEO of the diamond mining company is telling investors that the discovery of a new deposit of diamonds proves that previous concerns regarding the depletion of the company's mines were unfounded. This argument is deceptive, however; like the oil company that had to file for bankruptcy last year after quickly exhausting its newest oil reservoir, the diamond company has merely postponed its troubles, not solved them, by discovering this new deposit.

The analyst's statements, if true, most strongly support which of the following conclusions?


(A) The diamond company will likely file for bankruptcy by the end of this year.

(B) The rate at which diamonds can be mined from a deposit is similar to the rate at which oil can be extracted from a reservoir.

(C) There are techniques for assessing accurately the number of diamond deposits not yet extracted from a mine.

(D) Investors should continue to be concerned that the diamond company's mines are becoming depleted.

(E) The diamond company's troubles involve more than just the depletion of its mines.
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