LSAT (Law School Admission Test)Logical ReasoningHard
A financial analyst observes that companies with higher employee engagement scores consistently outperform their competitors in terms of stock market growth. The analyst concludes that investing in employee engagement initiatives is a reliable strategy for maximizing shareholder returns. Which of the following is an assumption required by the analyst's conclusion?
- ACompanies with high employee engagement do not have other common characteristics that also lead to stock market growth.
- BEmployee engagement is the only factor contributing to stock market growth.
- CThe methods used to measure employee engagement are accurate and consistent across companies.
- DShareholder returns are the primary goal of all companies.
Show answer & explanationAnswer & explanation
Correct answer: A. Companies with high employee engagement do not have other common characteristics that also lead to stock market growth.
The analyst observes a correlation (high engagement, high returns) and concludes a causal link (engagement initiatives lead to returns). For this causal link to hold, the analyst must assume there isn't some other common factor driving both high engagement and high returns. If such a factor existed, then engagement initiatives alone might not be sufficient to maximize returns.
Why the other options are wrong
- B. This is too strong; the conclusion only implies that engagement is a reliable strategy, not the exclusive factor.
- C. While important for the data, the accuracy of measurement is an assumption about the premise, not a required assumption for the causal conclusion itself to hold given the premise.
- D. The conclusion is about maximizing returns, not necessarily the primary goal of all companies. This is irrelevant to the causal link between engagement and returns.
Necessary Assumption (Causal)
For a causal conclusion to be valid, there must be an unstated premise that eliminates plausible alternative causes for the observed effect.
- Connects premise to conclusion
- Must be true for the argument to hold
- Often rules out alternative explanations
Memory trick: No other secret agent is causing the effect!