Which of the following, if true, strengthens the argument of Domino Gr

QUESTION

Which of the following, if true, strengthens the argument of Domino Grace’s management?

A) Higher revenues would lead to higher profits for Domino Grace.
B) If the derivative investments perform poorly, managers at Domino Grace will not pay any financial penalties.
C) Domino Grace financial advisors are well-trained in handling complicated investment options.
D) Many other investment firms have offered derivatives.
E) Derivative investments are so complicated that most investors will not understand what they are buying.

ANSWER

Answer: C
Explanation: C) Derivatives might sound like a good idea, but they are complex. Can Domino Grace’s employees handle them? If Choice C is true, the answer is more likely to be “yes, they can,” and so Choice C strengthens the argument. Choice A says that higher revenues would be good, but that adds nothing. The question here is how to get higher revenues. Choice B weakens the argument slightly by suggesting that management might have a financial interest in doing something risky. Choice D doesn’t help because the issue at hand is Domino Grace. Choice E is a reason to avoid derivatives.