Corporate governance - logical inference
Question
Which of the following statements best reflects the logical inference from the passage given above?
Options
It is an important agenda of the countries around the world to ensure access to good external financing.
Good corporate governance improves the credibility of the firms.
International capital markets ensure that the firms maintain good corporate governance.
Good corporate governance paves the way for robust supply chains.
Explanation
The passage states that international investors actively search for firms where "standards of disclosure, of timely and accurate financial reporting, and of equal treatment to all stakeholders are met". Meeting these key indicators of corporate governance enhances the firm's attractiveness to outside capital. This dynamic is the literal definition of building business credibility. Option (b) captures this beautifully. Option (a) incorrectly elevates a firm-level financial benefit into a primary governmental agenda, option (c) reverses the cause-and-effect loop, and option (d) introduces an unmentioned variable ("supply chains").
Answer: (b).
Question details
Year
2023
Paper
CSAT
Question
Q22
Section
Reading Comprehension
Sub-topic
Economy passage
Type
RC - Corollary inference
Difficulty
Medium
Source hint
Passage-based comprehension
Same sub-topic — other years
Economy passage has appeared in multiple CSAT papers:
See all questions on Economy passage
Browse every tagged question across all years