In the early to mid-1980s, a business practice - MGMAT RC

[tim]

So i don't understand why the correct answer is "describe the evolution and application of a certain financial device". The passage talk about only 80s. Only place where passage talks about 90s is in the example paragraph.
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So i am not convinced why choice D "explain the popularity of leveraged buyouts during a certain period" is wrong?

You make it sound like the entire evolution of the leveraged buyout couldn't have happened in the 80s and early 90s, whereas the passage makes it pretty clear this was exactly the case. Of course, this does nothing to address why you are unconvinced of why D is wrong. D is wrong because it does not EXPLAIN the popularity. Saying something is popular is not an explanation for why it is popular..

[rte.sushil]

The passage provides support for which of the following statements?

A. Leveraged buyouts are utilized primarily by small companies.
B. Some companies purchased through leveraged buyouts fell short of their buyers' expectations.
C. Today, no banks or other lending institutions will finance leveraged buyouts.
D. Most leveraged buyouts bring significant financial rewards to the buyers.
E. Leveraged buyouts were responsible for much of the economic growth of the 1980s.

OA is B
but i think, B can't be correct because:
in the passage,Many of these deals resulted in the evisceration of the purchased companies, as subparts were sold to pay down the loans and employees were laid off to reduce costs and increase profits. -> How many can be some as stated in option B. If in B it would have been many then it would have been correct.
But, in the passage, Many of the main corporate figures of the 1980s saw spectacular rises . It tends for option D.

So i think D should be correct not B because of "many" and "some "

Please correct.

[jlucero]

The passage provides support for which of the following statements?

A. Leveraged buyouts are utilized primarily by small companies.
B. Some companies purchased through leveraged buyouts fell short of their buyers' expectations.
C. Today, no banks or other lending institutions will finance leveraged buyouts.
D. Most leveraged buyouts bring significant financial rewards to the buyers.
E. Leveraged buyouts were responsible for much of the economic growth of the 1980s.

OA is B
but i think, B can't be correct because:
in the passage,Many of these deals resulted in the evisceration of the purchased companies, as subparts were sold to pay down the loans and employees were laid off to reduce costs and increase profits. -> How many can be some as stated in option B. If in B it would have been many then it would have been correct.
But, in the passage, Many of the main corporate figures of the 1980s saw spectacular rises . It tends for option D.

So i think D should be correct not B because of "many" and "some "

Please correct.

I think you should memorize this inequality:

some < many < most (more than 50%)

You can say some companies fell short of expectations b/c the passage says many were broken up and sold off (Nabisco is one). But to say that most buyouts reaped huge rewards is beyond what they mention here. Just because some people got huge rewards doesn't mean more than 50% did.

[Meerak869]

Hi,

I can understand your frustration because this is a really tough problem, and the presence of an answer choice such as D makes it even tougher!

Answer choice D takes the proper tone because it is neutral as signified by the use of the word explain. Furthermore, the first sentence of the passage does mention that the leveraged buyout became popular in the early to mid-1980's. The passage as a whole, however, does not explain why the leveraged buyout was popular. In fact, paragraphs 2 & 3 do not at all discuss the popularity of the leveraged buyout but do explain how the leveraged buyout was applied and how its use peaked with the RJR deal before plummeting due to shortcomings in the financial device. The passage as a whole thus describes how the use of the leveraged buyout evolved over time in the 1980's.

Answer choice C is correct because the passage describes how the leverage buyout was applied in paragraphs 2 & 3. Furthermore, the entire passage describes how the leveraged buyout saw its popularity rise in the 1980's and peak with the RJR deal before plummeting in popularity according to the final passage.

"Evolution" in answer choice C refers to the rise and fall in popularity of the leveraged buyout and not necessarily to the progression of the leveraged buyout from its emergence to the present day. Though less common, this use of the term evolution is still correct.

This is truly a very tough question that provides valuable lessons on how to attack tough purpose questions in the future. Remember to consider the passage as a whole and you'll be in better shape going forward.

Thanks,
Chris

how can they use the term financial device for a business practice known as a "leveraged buyout" in option C.
Can someone explain?