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Critical Reasoning: Inference Questions

It is often incorrectly assumed that investing in real estate is safer than investing in other markets. Because all investments are based upon predictions of future events, a profit can never be guaranteed.

If the statements above are correct, they most strongly support which of the following?

Incorrect.

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The argument does not mention anything about factors affecting the price of a property. You cannot reach the specific conclusion that the price of property is affected by political stability and economic situation ONLY from the statements above. It is possible that you are bringing outside information to bear on this problem, a classic error in inference questions. This answer choice presents new information that resembles an additional premise. Unfortunately, you should be looking for a conclusion based upon the current premises.

Incorrect.

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The phrase sold at a price higher than that at which it was bought is another way of saying profit. This answer choice, therefore, contradicts the premises by saying that investing in real estate always leads to profit.

Incorrect.

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This answer choice makes an illogical leap from the premises given. Although the argument tells us that real estate investments are not a sure way to make a profit, it does not completely reject them.

Incorrect.

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To ensure a profit is another way of saying guarantee. In premise B we are told that, like with any investment, profits in the real estate market cannot be considered a sure thing.

Well done!

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In premise B, the real estate market is included in a group with all investment types with respect to predicting a profit (or a loss). This answer choice, therefore, provides a logical conclusion to the argument.

The price of a property can be affected by many factors including the political stability and economic situation of its surrounding area.
The real estate market behaves like any other with respect to predicting gains or losses for any given investment.
Because property is a physical entity, it is always sold at a price higher than that at which it was bought.
Investing in the real estate market is complex and risky, and should be avoided at all costs.
To ensure a profit in the real estate market, experienced investors build models of future circumstances.