Which of the following, if true, weakens the argument of Domino Grace’

QUESTION

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

A) Competitors of Domino Grace have lured new customers by offering access to exotic new investment options.
B) A new political administration is expected to pass new financial regulations affecting derivative investments.
C) Derivative investments are similar to most investments in that when a trade is made, a gain on one side is mirrored by a loss on the other.
D) Many of the investors who are interested in derivative investments are also interested in traditional investments.
E) The opinions of Domino Grace stockholders are representative of the opinions of the investment community in general.

ANSWER

Answer: B
Explanation: B) Derivative investments sound like a pretty good idea, but the possibility of new government regulation in Choice B makes them sound less promising. Choice A makes it sound as though Domino Grace will need to offer derivatives (or something else complex and exotic) to keep up. Choice C points out a similarity between derivatives and traditional investments. There’s nothing in there that makes derivatives sound worse than what Domino Grace is doing now. Choice D makes a transition to derivatives sound easier. Choice E doesn’t help because we don’t know what those opinions are or what difference they would make.