Reading Comprehension

PT148 · S2 · P3 · Q19 Insider-Trading

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Passage A Insider-trading law makes it a crime to make stock transactions, or help others make stock transactions, based on information you have ahead of the general public because of your special position within a company.

Topic

Arguments for and against insider trading in the stock market

Framework

Present Debate

Main Point

Passage A argues that insider trading helps make stock prices more accurate and benefits the market, while Passage B argues that insider trading undermines fairness and investor confidence. - The Most Valuable Sentences: - Passage A: (Fourth paragraph) - Passage B: (Second paragraph)

P1 (Passage A): Definition of Insider Trading

Explains what insider trading is—using special, non-public info to trade stocks or help others trade.

P2 (Passage A): Questioning the Logic

Questions whether using exclusive information isn’t just what markets are all about; says the job of a stockbroker is to use information that others may not have yet.

P3 (Passage A): How Markets Work Best

Claims markets work best when information spreads quickly and widely, and that allowing people with good info to act helps prices reflect reality.

19.

The passages' references to the analysis of information about stocks (second-to-last sentence of the second paragraph of passage A, second-to-last sentence of the first paragraph of passage B) are related in which one of the following ways?

Passage A presents it as
Bad Match Passage A
The author of A is never saying that "analyzing information about stocks isn't necessary". It seems like the author of passage A is saying, "the entire field of stock brokering is based on [this type of analysis]."
3% picked this
Passage A uses it as
Bad Match Passage A
The author of A is never saying that, "analyzing stock information is one example of an activity that can be done that compensates for a lack of transparency". The author of passage A isn't actually complaining that the market lacks transparency (remember, passage A doesn't even mind insider trading). Only passage B talks about transparency.
24% picked this
Passage A presents it as
Bad Match Passage A
Passage A is never arguing anything is "unfair", because he's the one saying insider trading is fine (it's fair). If we continued reading, it's also not the case that passage B argued that analyzing stock information increases transparency. She was just saying for analysis of stock information to be fair, we need transparency.
9% picked this
Correct
Passage A presents it as
Why this is right
This speaks to the difference in purpose in how each passage used this quote. Passage A was saying, "Insider trading is fiiiine. The whole stock market is about taking advantage of knowing something that other investors don't know. Isn't this just that?" Passage B is saying that insider trading is unfair, because the stock market is supposed to be about rewarding whomever is best at analyzing stock information, whereas profiting off insider information (which by definition isn't known by other investors) is not that.
Skill tested: Local Purpose · how this choice captures the passage's function is the move to repeat next time.
56% picked this
Passage A treats it as
Bad Match for Passage A
Passage A is never saying that analyzing stock information is an option that only brokers and professionals have.
7% picked this

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