Reading comp PrepTest 157 · Section 4 · Question 10
Passage
Passage A Markets, such as stock exchanges, distill the collective wisdom of millions of individuals into a single number, and
Remaining source text redacted.
Passage walkthrough
Passage Summary Topic:
Social Science
Passage A
Paragraph 1
Passage B
Paragraph 1
Main Points?
Passage A: Markets, including prediction markets, reflect the collective knowledge of many investors with remarkable efficiency.
Passage B: Markets, including prediction markets, are not inherently reliable; instead, they merely reflect the majority opinion at any given time.
Key Lines?
Passage A: Paragraph 1, Sentence 2 (P1, S1) - Author's attitude toward markets
P1, S2 - Contrast to committees and polls
P2, S2 - Example of a reliable forecast market
P2, S5 - Illustration of efficiency
P2, S2 - Reason
P3, S1 - Another reason
Passage B: P1, S1 - Author's attitude toward markets
P2, S1 - Example of unreliable forecast market
P3, S1 - Comparison
P4, S2 - Author's explanation of markets' function
Meta-Structure? Relationship Between Passages?
Relationship - Opposing Viewpoints: The authors of these two passages have opposing viewpoints. The author of passage A places a lot of ... ahem ... stock into markets, particularly in their efficiency and accurate forecasting. In contrast, the author of passage B does not believe markets are inherently trustworthy or accurate predictors, instead claiming that they merely reflect the majority opinion at a given time. Even so, there are a few moments in which these authors find common ground. Both think forecast/prediction markets reflect what the market as a whole believes (PA, P2, S6; PB, P2, S2), and both think the requirement that you invest money into a market makes markets at least slightly more reliable than polls (PA, P1, S2; PB, P4, S4).
Example (Both): Both passages bring up an example — the same example, in fact — to prove a minor point. In passage A, the author cites the accuracy of the Iowa Electronic Markets to illustrate the reliability of markets, as opposed to polls (PA, P2, S2). In passage B, the author cites a recent election in which the Iowa Electronic Markets' forecast was inaccurate for nearly a year to illustrate how markets are not infallible (PB, P2). Since the same example is used in both passages — and both are used to support each passage's main point — we should expect at least one question about them.
Comparison (Both): Both passages compare markets to polls. And both claim that markets are at least somewhat more reliable than polls, as markets require people to back up their opinions with money (PA, P1, S2; PB, P4, S4). This is a point on which the authors agree, in passages in which they mostly disagree, so we should expect a question on this as well.
Last Thoughts?
This is a quintessential Opposing Viewpoint passage, so expect several questions about the authors’ disagreement, and at least one question about a point of agreement.
Social Science
Passage A
Paragraph 1
- Paragraph note
- Author: Efficiency of markets
- Views, minor Meta-Structures, points of intersection, and the author's attitude
- Comparison: Efficiency of markets (requires "hard dollars," rewards people who are "right") vs. committees/polls (doesn't require dollars, rewards loudest/most prestigious)
- Author's attitude: "amazing efficiency" (first sentence)
- Paragraph note
- of "forecast market"
- Views, minor Meta-Structures, points of intersection, and the author's attitude
- Example: Iowa Electronic Market (second through last sentence)
- Paragraph note
- Support: Market's efficiency
- Views, minor Meta-Structures, points of intersection, and the author's attitude
- Definition: Efficiency: Market learns what informed people know (first sentence)
- Example: Experiment with fictional stock and "insiders" (second through last sentence)
- Author's attitude: "lightning fast and very accurately" (first sentence)
Passage B
Paragraph 1
- Paragraph note
- Author: Markets not perfect
- Views, minor Meta-Structures, points of intersection, and the author's attitude
- Author's attitude: "not infallible" (first sentence), "get over it" (last sentence)
- Paragraph note
- Support: Iowa Electronic Market's inaccuracy
- Views, minor Meta-Structures, points of intersection, and the author's attitude
- Undermines Passage A, second paragraph
- Paragraph note
- Comparison to horseracing
- Views, minor Meta-Structures, points of intersection, and the author's attitude
- Comparison: Lower price of stock = greater odds for horse
- Paragraph note
- Author's correction: Prediction polls simply reflect majority opinion at a given time
- Views, minor Meta-Structures, points of intersection, and the author's attitude
- Similarity to passage A: Similar definition of "forecast" market from the second paragraph
- Similarity to passage A: claims that "entrance fees" of markets is an advantage over polls like passage A's author did in the first paragraph
- Author's attitude: "merely reflect" (first sentence), "does not imbue them with any special omniscience" (second sentence), "more serious responses," "just as potentially wrong" (third sentence)
Main Points?
Passage A: Markets, including prediction markets, reflect the collective knowledge of many investors with remarkable efficiency.
Passage B: Markets, including prediction markets, are not inherently reliable; instead, they merely reflect the majority opinion at any given time.
Key Lines?
Passage A: Paragraph 1, Sentence 2 (P1, S1) - Author's attitude toward markets
P1, S2 - Contrast to committees and polls
P2, S2 - Example of a reliable forecast market
P2, S5 - Illustration of efficiency
P2, S2 - Reason
P3, S1 - Another reason
Passage B: P1, S1 - Author's attitude toward markets
P2, S1 - Example of unreliable forecast market
P3, S1 - Comparison
P4, S2 - Author's explanation of markets' function
Meta-Structure? Relationship Between Passages?
Relationship - Opposing Viewpoints: The authors of these two passages have opposing viewpoints. The author of passage A places a lot of ... ahem ... stock into markets, particularly in their efficiency and accurate forecasting. In contrast, the author of passage B does not believe markets are inherently trustworthy or accurate predictors, instead claiming that they merely reflect the majority opinion at a given time. Even so, there are a few moments in which these authors find common ground. Both think forecast/prediction markets reflect what the market as a whole believes (PA, P2, S6; PB, P2, S2), and both think the requirement that you invest money into a market makes markets at least slightly more reliable than polls (PA, P1, S2; PB, P4, S4).
Example (Both): Both passages bring up an example — the same example, in fact — to prove a minor point. In passage A, the author cites the accuracy of the Iowa Electronic Markets to illustrate the reliability of markets, as opposed to polls (PA, P2, S2). In passage B, the author cites a recent election in which the Iowa Electronic Markets' forecast was inaccurate for nearly a year to illustrate how markets are not infallible (PB, P2). Since the same example is used in both passages — and both are used to support each passage's main point — we should expect at least one question about them.
Comparison (Both): Both passages compare markets to polls. And both claim that markets are at least somewhat more reliable than polls, as markets require people to back up their opinions with money (PA, P1, S2; PB, P4, S4). This is a point on which the authors agree, in passages in which they mostly disagree, so we should expect a question on this as well.
Last Thoughts?
This is a quintessential Opposing Viewpoint passage, so expect several questions about the authors’ disagreement, and at least one question about a point of agreement.
Question prompt
The authors of the
Remaining source text redacted.
Why the credited answer is right
Credited answer: D
The notes below walk through why it fits the stem and how to eliminate the rest.
Question Type
Social Science
Answer choices
-
AThey are a much Remaining source text redacted.
Why choice A is not credited
The author of passage A probably agrees with this statement. We can infer that view when that author notes that markets don't benefit the opinions of anyone with "the most degrees after their name" (PA, P1, S3). However, the author of passage B has no express opinion on this issue. The issue of expertise is never brought up or alluded to in that passage. And based on the author of passage B's general view on the reliability of markets, they'd be far more likely to disagree with this statement than to agree with it. Because the latter author has no opinion on this answer choice, it is incorrect. -
BThey move in completely Remaining source text redacted.
Why choice B is not credited
Both authors probably disagree with this sentiment. The author of passage A claims that markets are very efficient — they quickly and accurately reflect what informed people know (PA, P3, S1). So markets are not erratic; instead, markets move toward the truth that only "insiders" know about. And the author of passage B claims, in the analogy to racetracks, that markets move predictably. As the author implies in that analogy, the markets reflect the general opinion about an asset's "health" or value (PB, P3). When the asset begins to look more valuable, the market will reflect that. Since both authors would disagree with this statement, this answer choice is incorrect. -
CThey are easily manipulated Remaining source text redacted.
Why choice C is not credited
Although the author of passage A discusses the effect people with "inside knowledge" can have on markets, that author never claims that such people can "easily manipulate" markets "for long periods." In fact, that author likely believes the opposite; in the third paragraph, they discuss the efficiency with which inside information becomes reflected in market prices. And passage B's author never brings up "inside knowledge." Either of these issues would be enough to eliminate this answer choice. -
DThey are affected by Remaining source text redacted.
Why choice D matches the stem
We can infer that both authors think markets are affected by new information becoming public. In the study cited in the third paragraph, passage A's author suggests that when certain "insiders" begin trading with new information, that information affects how others buy and sell on markets. As that author puts it, "within seconds, everyone was acting as if they were insiders" (PA, P3, S5). And the author of passage B claims, in the analogy to racetracks, that markets respond to new information. As the author implies in that analogy, the markets change based on the general opinion about an asset's "health" or value (PB, P3). When the asset starts to look more valuable, the market will reflect that. Since both authors agree with this statement, this answer choice is correct. -
EThey are no better Remaining source text redacted.
Why choice E is not credited
Question Type:
Tone/Author Agree
Strategy Overview:
Review the main points of the two passages, look for the answer choice that presents an issue both authors would agree with, referring back to the passage as necessary
Answer Anticipation:
Even in a set of passages in which the authors are primarily in disagreement, there can still be a few issues the authors agree on. This question asks us to find one of those points of agreement. As discussed in the "Relationship — Opposing Viewpoints" excerpt of the Meta-Structures section above, there are a few points we already anticipated the authors agree on. Both authors think forecast/prediction markets reflect what the market as a whole believes (PA, P2, S6; PB, P2, S2), and both think the requirement that you invest money into a market makes markets at least slightly more reliable than polls (PA, P1, S2; PB, P4, S4). And many times, the point of agreement might relate back to the central topic of each passage. The authors agree on what markets are and how they function (they just disagree on how reliable those markets are at predicting future events). So the correct answer will likely relate to one of these.
In addition, we can double-check each answer choice by asking ourselves: (1) Does each author have an opinion on this? (2) Does each author agree with this? If we can answer "Yes" to both questions, it's the correct answer.
Answer Choice Explanation:
Both authors would disagree with this statement, making this answer choice incorrect. Both claim that markets are at least somewhat more reliable than polls, as markets require people to back up their opinions with money (PA, P1, S2; PB, P4, S4). So neither author would claim that markets are "no better" at predicting elections than polls.
Key Takeaway:
In a Comparative passage that features an Opposing Viewpoints Meta-Structure, the correct answer to a question that asks for a point of agreement will often reflect basic facts about the subject matter of the passage. To truly disagree about a subject, two authors will often need to first agree with basic facts about that subject. Two authors can disagree on whether mangoes are delicious, but they'll first need to stipulate that the word “mango” refers to yellow-orange, tropical stone fruit. So a question about these points of agreement will frequently reflect these basic facts, as the correct answer to this question did.
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