Free Practice Question
CR · Critical Reasoning
555-605
Inference
Corporate officers and directors commonly buy and sell, for their own portfolios, stock in their own corporations. Generally, when the ratio of such inside sales to inside purchases falls below 2 to 1 for a given stock, a rise in stock prices is imminent. In recent days, while the price of MEGA Corporation stock has been falling, the corporation’s officers and directors have bought up to nine times as much of it as they have sold.
The facts above best support which of the following predictions?
Answer Choices
Correct answer marked belowA
The imbalance between inside purchases and inside sales of MEGA stock will grow even further.
B
Inside purchases of MEGA stock are about to cease abruptly.
The price of MEGA stock will soon begin to go up.
Correct
D
The price of MEGA stock will continue to drop, but less rapidly.
E
The majority of MEGA stock will soon be owned by MEGA’s own officers and directors
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Sign in to commentWhat this question tests
What it tests
Whether you can draw a conclusion that must follow from the stated facts.
Common trap
Choosing an option that could be true or is likely true — inference answers must be guaranteed by the passage.
Details
Difficulty
555-605
Type
CR