Which of the following, if true, most clearly undercuts Brandon’s advi

QUESTION

Which of the following, if true, most clearly undercuts Brandon’s advice?

A) Aside from BoxCorps, all of the club’s previous choices have advanced in value.
B) The father of one club member, who is a broker, thinks Circuits Unleashed is a wiser choice.
C) BoxCorps has announced plans to open 100 new locations nationwide.
D) Excelsior’s chemotherapy drugs have not yet progressed to the first level of testing.
E) The book value of Excelsior’s stock is currently less than its market value.

ANSWER

Answer: D
Explanation: D) As with any new company, promise of a profitable new product depends on its success in testing. So Choice D is correct: If Excelsior’s drugs have not yet advanced to the testing stage, then the club has no hard evidence to show that it will ever produce a marketable product. None of the other choices are as definitive. While Choice C indicates that BoxCorps has hopes to expand its business, the expense of the new locations will cut into profits for some time to come. The outcome of previous investments (Choice A) does not indicate that this one will also be profitable. The opinion of the club member’s father (Choice B), absent factual reasons, is no more than that. As the book value of any stock (Choice E) is usually less than its market value, this fact is neither here nor there.