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Finance & disclosure – sector-specific ratings for investor protection: “Though agencies like CRISIL and ICRA exist, there is demand for a separate rating agency for IT companies to protect investors.” Identify which conclusions follow regarding the need for specialized assessment skills and immediate investor protection.

Difficulty: Medium

Correct Answer: Only conclusion I follows

Explanation:

Given data

  • Premise: There is a demand for a separate rating agency dedicated to IT companies, despite existing general agencies.
  • Conclusion I: Assessing IT companies requires a distinct set of skills, insights, and competencies.
  • Conclusion II: Investors in IT companies will now get protection for their investment.

Concept/Approach
Demand for a specialized agency implies the belief that sector-specific expertise is needed; it does not imply the agency already exists or that protection is immediate.


Step-by-step evaluation
1) The call for a separate agency logically presupposes that specialized evaluation skills are necessary ⇒ Conclusion I follows.2) The mere demand does not guarantee current protection or instant establishment of such an agency ⇒ Conclusion II does not follow.


Final Answer
Only conclusion I follows.

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