The investment firm OTSI specializes in making investments for its clients in particular foreign stock markets. OTSI's investment decisions in...
GMAT Critical Reasoning : (CR) Questions
The investment firm OTSI specializes in making investments for its clients in particular foreign stock markets. OTSI's investment decisions in the Nadurian stock market have been particularly well judged—it increased its clients' investments in that market just before each major market rise and decreased their investments just before each major fall. Clearly, therefore, any investor wanting to make money in the Nadurian market will do well by investing with OTSI.
Which of the following, if true, most seriously weakens the argument?
Passage Analysis:
| Text from Passage | Analysis |
| The investment firm OTSI specializes in making investments for its clients in particular foreign stock markets. |
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| OTSI's investment decisions in the Nadurian stock market have been particularly well judged—it increased its clients' investments in that market just before each major market rise and decreased their investments just before each major fall. |
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| Clearly, therefore, any investor wanting to make money in the Nadurian market will do well by investing with OTSI. |
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Argument Flow:
The argument starts by introducing OTSI as a foreign market specialist, then shows their perfect track record in the Nadurian market (buying before rises, selling before falls), and concludes that anyone wanting to profit in that market should invest with them.
Main Conclusion:
Any investor wanting to make money in the Nadurian market will do well by investing with OTSI.
Logical Structure:
Past performance → Future recommendation. The argument assumes that because OTSI timed the Nadurian market perfectly in the past, they'll continue to do so in the future, making them a good choice for other investors.
Prethinking:
Question type:
Weaken - We need to find information that would reduce belief in the conclusion that any investor wanting to make money in the Nadurian market should invest with OTSI
Precision of Claims
The argument makes absolute claims about OTSI's perfect timing ('just before each major market rise/fall') and uses this to make a universal recommendation ('any investor wanting to make money')
Strategy
To weaken this argument, we need to find reasons why OTSI's past perfect timing might not predict future success or why their services might not benefit new investors. We can attack the assumption that past performance guarantees future results, or show why their success might not be replicable for new clients
This choice tells us that the analyst responsible for OTSI's successful Nadurian investments has left the company. This directly weakens the argument because the conclusion assumes OTSI's past success will continue, but if the person who made all those perfectly timed decisions is gone, we have strong reason to doubt future performance. The argument treats OTSI as if the company itself has some inherent ability to time the market, but this choice reveals that the success was likely due to one specific person who is no longer there. This creates serious doubt about whether new investors will benefit.
This choice tells us that overall, the Nadurian market has risen substantially during OTSI's investment period. Rather than weakening the argument, this actually supports the idea that investing in the Nadurian market (and potentially with OTSI) could be profitable. If anything, this makes OTSI's track record look even better since they successfully navigated a generally rising market while still timing the ups and downs perfectly.
This choice indicates OTSI has been successful in other foreign markets too, not just Nadurian. This information strengthens rather than weakens the argument by showing that OTSI's success isn't limited to just one market. It suggests they have broader expertise in foreign market investing, which would make them an even more attractive choice for investors.
This choice tells us that some competitors have been almost as successful as OTSI in the Nadurian market. While this might suggest OTSI isn't the only good option, it doesn't weaken the core argument that investors will do well with OTSI. The argument only claims that people will do well with OTSI, not that OTSI is the only good choice. Having other successful competitors doesn't make OTSI a bad investment choice.
This choice points out that other countries' stock markets have risen more than Nadurian during this period. This might suggest that investing in those other markets would be more profitable, but it doesn't weaken the specific claim that investors wanting to make money in the Nadurian market should choose OTSI. The argument is specifically about succeeding in the Nadurian market, not about which market offers the best overall returns.