Q25

[deedubbew]

I chose A, can someone explain why B please and thank you.

[christine.defenbaugh]

Thanks for posting, deedubbew!

For any inference question, it is critical that we mine the passage for the appropriate information to answer the question. Here, the question ask about the fact that goodwill was excluded from probate valuation. Specifically, we want to know why the author brought this fact up! To the passage!

The goodwill exclusion is explicitly mentioned in lines 34-36, where it is referred to as 'a furher complication'. Hm....a further complication of what? Scanning up through the paragraph, line 24-26 has the key: "Uncertainties abound about how the probate rules for valuing assets were actually applied." The rest of the paragraph, including the goodwill exclusion, consist of examples of these uncertainties.

So, the goodwill exclusion is raised as an example of these uncertainties in probate valuation! Since goodwill was excluded, there might have been businesses that were worth more than their probate valuations would suggest. This particular uncertainty matches up directly with (B). The probate valuations (which excluded goodwill) for certain businesses (the ones with a lot of goodwill value) may have been significant undersestimations of their true market value (since they excluded goodwill)!


Not For That Purpose
(A) There's nothing to suggest that people knew little about goodwill in the nineteenth century. All we know is that probate valuations took no notice. That does not support the idea that no one knew anything about goodwill.
(C) Opposite! If it probably had an equal impact, then it wouldn't contribute to the uncertainties about the value of the various businesses.
(D) "single most important factor"? Too extreme!
(E) "consistently superior"? Modern probate would include goodwill, and the author probably thinks that's preferable, we nowhere does the passage suggest that modern valuations are "consistently superior".


Does that help clear things up a bit?