PT148.S2.P3.Q19 > Analytics

Hide analysis

Passage A.

Intro topic · Insider-trading law

Illegal to trade stocks based on info you get before the public because of your position in a company.

████████ ███████ █████ ██ ███████████ ███ ████ ████ ████████ ████ ███████████████ ████ ████ ██ ███ ████ ██████████ ██ █ ███████████ █████ ███████ ███ ██████ █████ ██ █████ █████████ ██ █████ ██ ██████ ███████ █████████ ████ ██████ █████ ████ ███ ████ █████ ██ ██ ██████ ██████████ ██ █████ ████████ ██ ███ ███████ █ ██████ ██████ ████ ██ ██ ███████████ ███ ████ ███ ███ ███ ██████ █████████ ██ █████████ ████ ████ ██████ █████ █████ ████ ███████ ████ ███ █ █████████ ██ █████ ██████ ████ ████ █████████

Criticism of insider-trading law · Stock market is based on using information that others don't have

It's not illegal to study a stock and trade based on your own analysis. This is similar to trading based on inside info.

█████ ███████ ████ ████ ████ ███ ███ ████████ ███████████ █████ █ ███████ ██ ██████ ██ ██████ ██ █████████ ██ ███████ ██ █████████ █████ ██████ █████████ █ ██████████ ████████ ████████████ ██ ██████████ ███████████ █████ ███ ███████████ ██ █ █████████ ██████ ██ █████ ████ █████ ███ ████ ████████ ███████████ █████ ████████ █████████████ ███ █████████ ██ ███ ██ ████ █████ ██████ ███████ █████

Support for criticism · Stock prices represent assessments of company value

Support for criticism · Insider-trading helps spread info about a company

It helps make stock prices more accurate, which is good for the whole stock market.

Support for criticism · Nobody thinks "insider nontrading" should be illegal

People decide not to trade based on inside knowledge. If that's OK, insider trading should be OK, too.

███████ █

███ ██ ███ █████ ██████████ ██ ███ █████ ██████ ██ █████████████ ██ █ ███████████ ███████ ███████████ ████ ██████████ ███████ █████████ ██ █████████ ██ ███ ████████████ ██ ███ ████ █████ ███████ ██ ███ ██████ ███ ████ ██ ██████ ████ ██ █████ ██ █████████ ███ ███████████ ███ ██████ ████ █████████ ██████████ ██ █ ███████████ █████ ███████ ████████ ███ ███ ████ ██████ ██ ██████ █ ████ ███████████ ███ ███████ ██ █████ ██ ██████████ █████ ███ ██████

Basic principle of stock market · Transparency

All info that influences trading decisions is available to everyone at the same time. This means successful stock-trading depends only on skill.

██ ███████████████ ███████████ ████ ██████ ████ ██████████ █████████ █████ ██ ███████████ ████ █████ ██████ █████ █████ ██████ ███ █████ ████ ██████ ██ ███ ██████ ███████████ █████ ████ █████████ ████████ ██████████ ██████████ ████ ████████ ███████████ ███ ███████ ██████ ████ ██████ ███████████ ███ ████ ████████ █████ █████████ ███ ██████ ████████ █████ ██████ ██ █████████ ██ ██████████ ███ █████ ██████ ██ ████ █████ ██ ███ █████ ███████

Perspective on insider-trading · Violates principle of transparency

Trading on inside info is unfair.

█████ ██ █████ ██████ █ ████ ██ ████████ ██████████ ███ █████ ██████████ ███████ ███ ███████ ██████ ██████ ██ ███ █████ ██████ ███████ ████ ███████ ████ ███ ████ ██████ ███ █████ █████ ██ ███████ ███████████ ██ ██ ████ ████ █████████ █████████ ███ ████ █████ ████ █████ ██ █████████ ███████ ████ █████ ████ ██████ ████ █████ ███████ ███████████ ████████ ██████████ █████ ████ ████ █████████ ██████ ██ ███ █████ ████ ████ ██ ████ ███ ██ ███████████ ███ ██ █████ ██████████ ████ ██ ██████████ █████████ ██████████████

Consequence of insider-trading · Unfairness causes loss of confidence in market, leads to less investment

Ultimately the whole market could be destroyed.

Passage Style

19.

The passages' references to the ████████ ██ ███████████ █████ ██████ ███████████████ ████████ ██ ███ ██████ █████████ ██ ███████ ██ ██████████████ ████████ ██ ███ █████ █████████ ██ ███████ ██ ███ ███████ ██ █████ ███ ██ ███ █████████ █████

Passage A presents ██ ██ ████████████ █████ ███ ████████ ███████████ ██ ███████ █████████ ██ █████ ███████ ███████ ███████ █ ████████ ██ ██ █████████ ███ ██████ █████ ██████████ ██████████

Passage A doesn’t present stock analysis as unnecessary.

Passage A uses ██ ██ ██ ███████ ██ ██ ████████ ████ ███████████ ███ ███ ████████ ████ ██ █████████████ ███████ ███████ █ ████ ██ ██ ██ ███████ ██ ██ ████████ █████ █████████ ██ ███████████ ████ ███ ████████████ ██ ███ ███████

Passage A doesn’t suggest that stock analysis “compensates” for the lack of transparency. Passage A doesn’t discuss market transparency or whether something can make up for it. It wouldn’t make sense to say that Passage A uses stock analysis as an example of something it doesn’t even mention.

26%

Passage A presents ██ ██ ██ ████████ ████ █████ ████ █████████ ██ ██████ █████████ ████ ███████ ███████ ███████ █ ████████ ██ ██ ██ ████████ ████ █████████ ███ ████████████ ██ ███ ███████

Passage A doesn’t suggest that there’s anything unfair about analyzing stocks and making decisions based on that analysis.

Passage A presents ██ ██ ██████████ ██ ███ ███████████ ██ ██████ ████████████ ███████ ███████ █ █████████ ██ ████ ███ ███████████ ██ ██████ ████████████

Passage A thinks stock analysis is similar to acquiring inside information in that both involve knowledge that others don’t have. However, Passage B thinks stock analysis is different from acquiring inside information in that there’s a difference in opportunity. Everyone has the opportunity to analyze stocks; not everyone has the opportunity to get inside information.

54%

Passage A treats ██ ██ ██ ██████ █████████ ████ ██ ███████ ███ █████ ████████████ ██████████████ ███████ ███████ █ ██████ ██ ██ ██ ██████ █████████ ██ ████████ █████████ ██ █████

We have no reason to think Passage A thinks stock analysis is something only brokers and professionals can do. Passage A mentions that the field of stock brokering is based on people using their knowledge to “profit themselves or their clients.” “Themselves” could include non-professionals. We have no reason to think “themselves” is limited to professionals.

Answer five questions and we'll estimate your score.

It takes about five minutes.

Take the free diagnostic

More free LSAT prep: Sample LSAT questions Full-length diagnostic & practice test All free LSAT resources

PrepTest 148 - Section 2 - Passage 3 - Question 19

Answer five questions and we'll estimate your score.

Difficulty

Analysis

Answer Popularity

Question history

Confirm action

PrepTest 148 - Section 2 - Passage 3 - Question 19

Answer five questions and we'll estimate your score.

Difficulty

Analysis

Answer Popularity

Question history

Want to know why the right answer is right?