#19 - Specific Reference, Must Be True, Purpose

[James Finch]

Hi Harvoolio,

Yes, that is right. Passage B is stating that stock analysis requires transparency, which means insider trading must be prohibited, which accords with answer choice (B)'s description. But Passage A analogizes simple analysis, of which different people have different levels of skills, ability, and information, to acting on insider information. This analogy cannot be described as "example of an activity that compensates for the market's lack of transparency," meaning (B) is a classic example of the half-right, half-wrong answer choice.

Hope this clears things up!

[harvoolio]

Yup it does. Thank you.

[Luna222]

Could someone please explain to me how D is the correct answer? I selected B and from the rest of the replies I understand how it is incorrect but I am still having trouble understanding how D is correct.

[Claire Horan]

Hi Luna222,

When you post a question, try to give some information about how you analyzed the question and what aspect you specifically had difficulty with. That way, the person answering can tailor their response a bit.

The question asks you to compare how the two passages refer to "analysis of information about stocks". Passage A brings up "analysis of information about stocks" in lines 11-14 as part of an argument that insider trading, defined as trading on information you have that others do not, is what traders do every day when they analyze whether a stock is overvalued or undervalued. Passage B brings up "analysis of information about stocks" in lines 40-42 as the skill that brings traders success in a transparent market, where information is available to all. The next paragraph then contrasts this situation with "insider-trading situations," where some participants have information that others don't have.

Thus, Passage A compares (notes the similarities between) "analysis of information about stocks" and "the acquisition of inside information", while Passage B contrasts (notes the differences between) "analysis of information about stocks" and "the acquisition of inside information." That's exactly what D says.

Please reply if you are still having trouble!