Just as Individual Stock Prices can Plummet, so can Individual Real GMAT Reading Comprehension

Reading Passage Question

Just as individual stock prices can plummet, so can individual real estate property prices. In California during the 1990s, for example, earthquakes rocked the prices of properties built on landfills. These quakes highlighted the dangers of building on poor soil. In the decade prior, real estate values in the communities of Times Beach, Missouri, and Love Canal, New York, plunged because of carcinogenic toxic waste contamination. (Ultimately, many property owners in these areas received compensation for their losses from the federal government as well as from some real estate agencies that didn’t disclose these known contaminants.)

‘Just as individual stock prices can plummet, so can individual real estate property prices’’ is a GMAT reading comprehension passage with answers. Candidates need a strong knowledge of English GMAT reading comprehension.

This GMAT Reading Comprehension consists of 7 comprehension questions. The GMAT Reading Comprehension questions are designed for the purpose of testing candidates’ abilities in understanding, analysing, and applying information or concepts. Candidates can actively prepare with the help of GMAT Reading Comprehension Practice Questions.

Solution and Explanation

1. Which of the following would be the best title for the passage?

(A) Don’t Build Your House in an Earthquake Zone
(B) The Story of Love Canal, New York
(C) Personal Real Estate Is Not a Foolproof Investment
(D) There’s No Point in Investing in Real Estate
(E) A Guide to Individual Stock Purchases

2. Why did the value of real estate plummet in Love Canal and Times Beach, according to the passage?

(A) Both communities were in earthquake zones.
(B) Real estate agencies did not disclose known contaminants.
(C) They were filled with noxious gases.
(D) Both towns were sites of carcinogenic toxic waste contamination.
(E) Both towns were located on contaminated shore fronts.

3. Based on the passage, it can be inferred that the former landowning citizens of Love Canal and Times Beach most likely did what?

(A) Fled both towns.
(B) Pursued legal action against the real estate agencies that did not disclose known contaminants to them before selling them property in the towns.
(C) Suffered from diseases caused by the contaminants.
(D) Sold their properties in the town at a loss.
(E) Wished that they had bought a property in an earthquake zone.

4. The author’s attitude towards purchasing individual real estate as an investment could best be described as which of the following?

(A) Cautious and factual
(B) Aggrieved and petulant
(C) Knowing and allusive
(D) Sceptical and discouraging
(E) Rhetorical and questioning

5. The parenthetical sentence at the end plays what role in this passage?

(A) It adds anecdotal information that may be of interest to the reader.
(B) It suggests a counter-argument to the main argument of the passage.
(C) It refers to another way of calculating the percentages shown in the passage.
(D) It clarifies that some property owners were eventually compensated for their losses.
(E) It is a citation.

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