Traders seeking early warnings of market instability have found a reliable indicator in currency futures behavior. Morgan Securities' research demonst...
GMAT Craft and Structure : (Structure) Questions
Traders seeking early warnings of market instability have found a reliable indicator in currency futures behavior. Morgan Securities' research demonstrates that futures contracts exhibit distinctive trading anomalies well before major economic announcements. These anomalies consistently appear in specific market regions, allowing analysts to pinpoint where significant financial disruptions are ______.
Which choice completes the text with the most logical and precise word or phrase?
systematic
cyclical
looming
speculative
Step 1: Decode and Map the Passage
Part A: Create Passage Analysis Table
| Text from Passage | Analysis |
|---|---|
| 'Traders seeking early warnings of market instability have found a reliable indicator in currency futures behavior.' |
|
| 'Morgan Securities' research demonstrates that futures contracts exhibit distinctive trading anomalies well before major economic announcements.' |
|
| 'These anomalies consistently appear in specific market regions, allowing analysts to pinpoint where significant financial disruptions are ______.' |
|
Part B: Provide Passage Architecture & Core Elements
Main Point: Currency futures trading patterns serve as an effective early warning system for predicting where financial disruptions will occur.
Argument Flow: The passage moves from a general discovery (futures as indicators) to specific research evidence (anomalies before announcements) to practical application (using patterns to predict disruption locations). The missing word should describe the nature or timing of these disruptions based on the early warning context.
Step 2: Interpret the Question Precisely
This is a fill-in-the-blank question asking us to choose the best logical connector. The answer must create the right relationship between what comes before and after the blank.
Step 3: Prethink the Answer
- The key context is 'early warnings' - the whole passage is about predicting market problems before they happen
- The anomalies appear 'well before major economic announcements' and help analysts 'pinpoint where' disruptions will occur
- Since this is about early detection and prediction, we need a word that captures the idea that these disruptions are approaching or about to happen - not that they're already occurring
- The word should convey the sense that these financial disruptions are imminent or threatening to occur, fitting with the early warning theme
systematic
- 'Systematic' means organized or methodical
- This doesn't fit the early warning context - we're not looking for how disruptions are organized, but rather their timing or imminence
- Students might think 'systematic' sounds sophisticated and business-like, but it misses the temporal aspect that's crucial here
cyclical
- 'Cyclical' means occurring in repeated cycles or patterns
- While markets do have cycles, this doesn't connect to the early warning theme - we need something about timing, not repetition
- Students familiar with economic cycles might be drawn to this, but the passage isn't about recurring patterns - it's about predicting when disruptions will happen
looming
- 'Looming' means approaching threateningly or about to happen
- Perfect fit for early warning context - if traders can get advance notice, they're identifying where disruptions are about to occur
- Matches the temporal relationship established by 'well before major economic announcements'
speculative
- 'Speculative' means based on conjecture rather than knowledge
- This contradicts the passage's emphasis on reliable indicators and research-based evidence
- The passage presents futures analysis as dependable, not speculative