Critical Reasoning – Market regulation: A regulatory authority sets up a review committee to identify reasons for unstable stock prices. Determine which assumption(s) are implicit: (I) This decision may restore investor confidence; (II) The committee has the expertise to diagnose the causes of stock-market volatility.

Given data

• Action: Establish a review committee to find causes of price instability.
• Assumption I: Investor confidence may improve because of this decision.
• Assumption II: The committee is capable (has expertise) to find the causes.

Concept/ApproachThe minimal necessary assumption is about the feasibility of the action achieving its stated purpose (diagnosis), not about secondary outcomes like sentiment.

Step-by-step reasoning• The stated goal is to 'find out reasons'. For this, it must be assumed the committee can, in principle, perform such analysis → II is necessary.• Investor confidence (I) may be an intended benefit but is not necessary to justify forming a diagnostic committee; the committee could be set up even if sentiment did not change.

Verification/AlternativeDeny II: If the committee lacks expertise, the setup is pointless with respect to the stated purpose → undermines the decision. Deny I: Confidence may or may not improve; the action is still rational for fact-finding.

Common pitfalls

• Confusing hoped-for outcomes (confidence) with necessary assumptions (capability).

Final AnswerOnly assumption II is implicit.