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.
Verbal Reasoning
Statement and Conclusion
Difficulty: Medium
Choose an option
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AOnly conclusion I follows
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BOnly conclusion II follows
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CEither I or II follows
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DNeither I nor II follows
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EBoth I and II follow
Answer
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/ApproachDemand 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 evaluation1) 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 AnswerOnly conclusion I follows.