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 The author suggests that the role of large institutions as stockholders differs from that of the “old-style capitalist” in part because large institutions:


Options:
A .   invest in the stock of so many companies that they cannot focus attention on the affairs of any single corporation.
B .   are prohibited by law from owning a majority of a corporation’s stock.
C .   are influenced by brokers who advise against long-term ownership of stocks.
D .   are able to put large amounts of stock on the market without depressing the stock’s value.
Answer: Option B
:
B

This question asks you to infer, from information stated in the passage, a way in which the role of large institutions as stockholders differs from that of the “old-style capitalist”.
The best answer is B. According to the passage, the old-style capitalists were able to play a dominant role in the corporations in which they held stock because they owned enough stock to do so. The passage also states that large institutions are legally barred from owning a majority of a company’s stock. From this it can be inferred that large institutions, because their ability to own stock is limited, do not play as dominant a role in the corporations of which they are stockholders as did the old-style capitalists.
Choice A is not correct. The passage does not indicate whether large institutions invest in many companies, few companies, or even just a single company.
Choice C is not the correct answer. The passage does not mention brokers or any other parties who might influence the investment choices made by large institutions.
Choice D is incorrect.The author notes that an institution’ sale of a large amount of stock would, in fact, decrease the stock’s value.



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