EA Reading Comprehension 3

Question 1

Passage: 'Social media platforms face a persistent tension between free expression and content moderation. Too little moderation allows harmful misinformation and harassment to proliferate; too much risks suppressing legitimate speech and centralizing power over discourse. Platforms have responded with algorithmic filtering, human review teams, and community-based flagging systems, none of which has resolved the underlying tension.' The passage suggests that content moderation is difficult primarily because:

Accepted Answer

Any approach to moderation involves trade-offs between competing values

Answer

The passage frames the challenge as an inherent tension between two values (free expression vs. safety) where no solution resolves both simultaneously.

Question 2

Passage: 'The efficient market hypothesis posits that asset prices fully reflect all available information. If this were completely true, consistently beating the market through stock selection would be impossible, as any advantageous information would be quickly priced in. However, documented market anomalies and the sustained performance of some investors challenge strong versions of this theory.' What is the relationship between the first two sentences and the third sentence?

Accepted Answer

The third sentence introduces evidence that challenges the claims in the first two sentences

Answer

The first two sentences present the efficient market hypothesis, and the third introduces challenges (anomalies, sustained investor performance) that contradict strong versions of it.

Question 3

Passage: 'Supply chain resilience has emerged as a strategic priority for businesses following major disruptions in the 2020s. Companies have responded by diversifying suppliers, increasing inventory buffers, and reshoring production. These strategies increase costs but are increasingly viewed as necessary insurance against future disruptions.' The author implies that the strategies described are:

Accepted Answer

Considered worth their costs given the risk environment businesses now face

Answer

The passage acknowledges these strategies 'increase costs' but describes them as 'necessary insurance,' implying companies accept higher costs because the protection is considered worthwhile.

Question 4

Passage: 'Behavioral finance challenges the classical assumption that investors are fully rational actors who always make decisions that maximize expected utility. Instead, behavioral finance incorporates psychological insights to explain why investors systematically deviate from rational models — through herding behavior, overconfidence, and anchoring to arbitrary reference points.' According to the passage, behavioral finance differs from classical finance primarily in that it:

Accepted Answer

Incorporates psychology to explain systematic deviations from rational behavior

Answer

The passage states behavioral finance 'incorporates psychological insights' as the defining distinction from classical finance's assumption of full rationality.

Question 5

Passage: 'Leadership research has shifted from trait-based approaches, which sought to identify innate characteristics of great leaders, to situational and contingency theories that recognize effective leadership as context-dependent. The most effective leaders are now understood to adapt their style to match the needs of their teams and circumstances rather than relying on a fixed set of behaviors.' Which best describes the evolution in leadership thinking described in the passage?

Accepted Answer

From emphasizing innate, fixed leader traits to emphasizing adaptive, context-sensitive leadership

Answer

The passage describes a shift from trait-based (innate characteristics) to situational/contingency theories (adaptation to context), directly matching the 'innate to adaptive' framing.

EA - Executive Assesment Practice Test

EA - Executive Assesment Practice Test

EA Reading Comprehension 3