Which of the following, if true, BEST supports the decision to sell Bo

QUESTION

Which of the following, if true, BEST supports the decision to sell BoxCorps and purchase Excelsior as a prudent financial move?

A) BoxCorps has consistently underperformed, compared with stocks in its industry.
B) Most of Brandon’s previous recommendations have proved to be profitable for the club.
C) The stock of Krebs GmbH, a European biotech company, recently increased 200 percent in value.
D) A recent expose on a national cable TV new network accused Excelsior of exploiting illegal immigrants.
E) A majority of the club members voted in favor of Brandon’s recommendation.

ANSWER

Answer: A
Explanation: A) One of the objectives of a critical stock-watcher is to see if a given company is keeping track with its competitors. So Choice A is correct: If BoxCorps is lagging its competitors, then that suggests that it is no longer an asset to the club’s portfolio. None of the other choices support the decision. Choices B and E show that the club is generally supportive of Brandon’s decisions, but that does not, in itself, prove that this decision is wise. Even though another stock of the same sort jumped in value (Choice C), that does not indicate that others in the same field will do so as well. The expose of Excelsior (Choice D), if it is valid, might depress the stock’s value, which weakens Brandon’s position.