Researchers from a British university were investigating the impact of a company's public visibility on its charitable donations. In order...

GMAT Multi Source Reasoning : (MSR) Questions

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Multi Source Reasoning

Case Study

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Study Parameters

Study Results

Researchers from a British university were investigating the impact of a company's public visibility on its charitable donations. In order to control for variables other than visibility, the researchers limited their study to companies that were continuously on the FTSE 100 Index (\"a popular stock index\") from 1990 to September 2003.

The researchers conducted random surveys of British nationals in October 2003 and asked whether they had heard of each company. The high-visibility group was composed of only the 7 companies that more than 85% of the respondents had heard of. The low-visibility group was composed of only the 7 companies that less than 25% of the respondents had heard of. The reason that the respondents had heard of the companies in the high-visibility group rather than the companies in the low-visibility group was because the companies in the high-visibility group were larger, more financially successful, or associated with consumer brands and products.

The researchers evaluated the charitable giving of these companies according to the charitable donation percentage. The charitable donation percentage is the value of total monetary donations as a percentage of total pretax profits. The rationale for this standard was that it is difficult to evaluate the value of nonmonetary donations (for example, services), and donations as a percentage of profit were considered a better measure of corporate charity than the absolute value of corporate donations.

Ques. 1/3

For each of the following percentages, select Yes if the percentage is greater than the mean charitable donation percentage of each visibility group in every year represented in the graph. Otherwise, select No.

25%

2.5%

Yes

25%

2.5%

Solution

OWNING THE DATASET

Understanding Source A: Text - Study Parameters

Information from Dataset	Analysis
""Researchers from a British university were investigating the impact of a company's public visibility on its charitable donations""	Study examines relationship between how well-known a company is and how much it donates to charity Academic research focusing on visibility as the key variable affecting charitable behavior
""limited their study to companies that were continuously on the FTSE 100 Index...from (mathrm{1990}) to September (mathrm{2003})""	All companies were major UK firms for the entire (13+) year period Controls for company stability and size, ensuring fair comparisons between groups
""high-visibility group was composed of only the (mathrm{7}) companies that more than (mathrm{85\%}) of the respondents had heard of""	Very selective criteria - only the most recognized companies included Small sample of household-name companies allows focus on clear visibility distinctions
""low-visibility group was composed of only the (mathrm{7}) companies that less than (mathrm{25\%}) of the respondents had heard of""	Creates stark contrast with high-visibility group Despite being major FTSE 100 companies, these are relatively unknown to the public, suggesting B2B or specialized sector companies
""companies in the high-visibility group were larger, more financially successful, or associated with consumer brands and products""	Multiple factors contribute to high visibility Consumer-facing businesses naturally have higher public recognition than B2B companies
""charitable donation percentage is the value of total monetary donations as a percentage of total pretax profits""	Standardized metric for fair comparison between companies of different sizes Using pretax profits as baseline avoids tax policy effects and focuses only on cash donations

Summary: Study examines whether highly visible FTSE 100 companies donate differently than less visible ones, using donation percentage of pretax profits as the standardized metric.

Understanding Source B: Chart/Graph - Study Results

Information from Dataset	Analysis
""The graph shows the mean charitable donation percentage for the high- and low-visibility groups from (mathrm{1988-2002})""	Data shows averages across each (7)-company group over (15) years Time period extends before study's stated (1990) start date Timeline contradiction: Source A states study period from (1990), but graph shows data from (1988)
""in (mathrm{1991}) the high-visibility group gave (mathrm{0.43\%}) of its pretax profits""	Provides specific example to interpret graph scale Even at peak, donations are less than half a percent of profits Confirms the donation percentage metric described in Source A is being used consistently
Visual: High-visibility line shows variation from (mathrm{0.135\%}) to (mathrm{0.43\%})	High-visibility companies show volatile donation patterns with (3x) range Peak in early 1990s followed by general decline Consumer-facing companies' donation volatility may reflect their greater exposure to public scrutiny and market pressures
Visual: Low-visibility line relatively stable from (mathrm{0.09\%}) to (mathrm{0.175\%})	Low-visibility companies maintain steadier donation levels with less than (2x) range Less responsive to external factors Companies with low public recognition show more stable donation patterns, consistent with less public exposure
Visual: High-visibility line generally above low-visibility throughout period	More visible companies typically donate higher percentage of profits Gap varies but rarely disappears over (15) years Larger, more successful companies (high-visibility) do show higher donation rates, confirming that size and success drive both visibility and donation capacity

Summary: Graph reveals high-visibility companies donate more but with greater volatility than low-visibility companies over (1988-2002), confirming that company characteristics like size and consumer focus create interconnected patterns in both visibility and charitable giving.

Overall Summary

Household-name companies (known by (gt 85\%) of people) donate roughly twice as much as lesser-known companies on average, but with much more year-to-year variation
The donation rate difference between visible and less-visible companies persists across the entire (15)-year period, reflecting fundamental differences in company characteristics
Consumer brand companies show more volatile donation patterns than B2B companies, likely due to greater public scrutiny
Even the largest, most successful companies rarely donate more than (0.5\%) of their pretax profits
Despite a timeline discrepancy between stated study parameters and presented data, the core finding remains clear: public visibility strongly correlates with both higher charitable giving rates and greater variation in those rates

Question Analysis

In Plain Terms: For each percentage ((25\%), (2.5\%), (0.25\%)), I need to check if it's larger than BOTH the high-visibility group's donation percentage AND the low-visibility group's donation percentage for EVERY single year shown in the graph.

Key Constraints

Must be greater than BOTH visibility groups
Must be true for EVERY year from 1988-2002
Comparison is against the actual percentages shown in the graph

Connecting to Our Passage Analysis

The analysis contains the data table with all donation percentages for both groups across all years
Can Answer from Analysis Alone: YES - The data table provides all necessary values

Solution Analysis

From the data table, I need to identify the range of values for each group to efficiently evaluate the thresholds
Each threshold must exceed ALL values from BOTH groups across ALL years

Statement 1 Evaluation

Is 25% greater than all donation percentages in the graph?

Threshold: (25\%)
Maximum value in graph: (0.43\%) (high-visibility, 1991)
Difference: (25\%) is much larger than (0.43\%)
YES - (25\%) exceeds all values

Statement 2 Evaluation

Is 2.5% greater than all donation percentages in the graph?

Threshold: (2.5\%)
Maximum value in graph: (0.43\%) (high-visibility, 1991)
Difference: (2.5\%) is larger than (0.43\%)
YES - (2.5\%) exceeds all values

Statement 3 Evaluation

Is 0.25% greater than all donation percentages in the graph?

Threshold: (0.25\%)
Many values exceed this threshold: e.g., (0.43\%) in 1991, (0.375\%) in 1992
Difference: (0.25\%) is smaller than many high-visibility values
NO - (0.25\%) does NOT exceed all values

Verification

High-visibility group range: (0.135\%) (min, 1988) to (0.43\%) (max, 1991)
Low-visibility group range: (0.09\%) (min, 1998) to (0.175\%) (max, 1991)
(25\% > 0.43\%) (max of all values) ✓
(2.5\% > 0.43\%) (max of all values) ✓
(0.25\% < 0.43\%) and many other high-visibility values ✗

Final Answer

(25\%): Yes
(2.5\%): Yes
(0.25\%): No

Answer Choices Explained

25%

2.5%

Yes

25%

2.5%

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