If a corporation obtains funds fraudulently, then the penalty should take into account the corporation's use of those...

on June 22 at 05:09PM

Totally lost

How could E possibly be the right answer?

1 Reply

Shunhe on June 23 at 02:31AM

Hi @yckim2180,

Thanks for the question! So let’s take a look at the stimulus here. We’re being told that if a corporation gets funds via underhanded methods, then the penalty should include profits made off of those funds. So maybe a bad corporation got $100k of fraudulent funds initially. But them it invested them and made $200k in profits. Then the penalty shouldn’t be limited to the original $100k; it should also include the $200k of profits. This is the principle being espoused in the stimulus, and now we need to find an answer choice that’s most like it.

Now take a look at (E). Here, a convicted criminal writes a book about their crime and makes money off of it. So this is like a criminal doing something bad initially, and then getting more profit off of it, similar to the company doing something bad initially, and then getting more profit off of it. And then (E) says that proceeds of the book should be donated to a charity chosen by a third party. So similarly, profits from doing the bad thing shouldn’t go towards the criminal, even if they’re downstream effects. Since this matches the stimulus’s principle, we can pick (E) as the correct answer.

Hope this helps! Feel free to ask any other questions that you might have.