LSAT 134 – Section 2 – Question 04

LSAT 134 - Section 2 - Question 04

October 2011

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Question
QuickView		 Type Tags Answer
Choices		 Curve Question
Difficulty		 Psg/Game/S
Difficulty		 Explanation
PT134 S2 Q04
+LR
+Exp
Strengthen +Streng
Link Assumption +LinkA
A
0%
148
B
1%
150
C
99%
163
D
0%
155
E
0%
149
120
121
130
 +Easiest 146.032 +SubsectionMedium

Editorialist: In a large corporation, one of the functions of the corporation’s president is to promote the key interests of the shareholders. Therefore, the president has a duty to keep the corporation’s profits high.

Summarize Argument
The editorialist concludes that the president of a corporation has a duty to keep profits high because their role involves promoting the shareholders’ key interests.

Notable Assumptions
The editorialist assumes that high profits are a key interest of shareholders and that by keeping profits high, the president of a corporation is at least partially promoting shareholders’ key interests.

A
Shareholders sometimes will be satisfied even if dividends paid to them from company profits are not high.
This doesn’t help to establish that high profits are a key interest of shareholders. The editorialist doesn’t mention whether the dividends paid to shareholders should be high or not.
B
The president and the board of directors of a corporation are jointly responsible for advancing the key interests of the shareholders.
Even if the president shares this responsibility with the board, it doesn’t change the fact that the president promotes shareholders’ interests. And (B) doesn’t help to establish that high profits are one of those interests.
C
Keeping a corporation’s profits high is likely to advance the important interests of the corporation’s shareholders.
This suggests that high profits are a key interest of shareholders. If keeping profits high is likely to promote shareholders’ key interests and the president’s role involves promoting their interests, this suggests that the president does have a duty to keep profits high.
D
In considering where to invest, most potential shareholders are interested in more than just the profitability of a corporation.
Even if shareholders are interested in more than just profit, we still need to know whether high profits are among their key interests.
E
The president of a corporation has many functions besides advancing the important interests of the corporation’s shareholders.
It doesn't matter how many other functions the president has. Since one function is to promote shareholders' interests, we still need to determine if high profit is one of those interests.

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LSAT PrepTest 134 Explanations

Section 1 - Logical Reasoning

Section 2 - Logical Reasoning

Section 3 - Logical Reasoning

Section 4 - Reading Comprehension

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