SAT Reading & Writing · Words in Context

Despite the merger announcement, financial analysts described investor confidence as ______, pointing to unusually low trading volume and…

Despite the merger announcement, financial analysts described investor confidence as ______, pointing to unusually low trading volume and a wave of insider stock sales in the weeks that followed.

Which choice completes the text with the most logical and precise word or phrase?

Answer and explanation

Answer: B: guarded

Low trading volume and insider selling are both indirect signals of caution instead of enthusiasm, which guarded names: cautiously withholding full confidence. Exuberant would mean enthusiastic and unrestrained, the opposite of what these signals suggest. Incidental concerns something minor or accidental, not a deliberate stance toward the merger. Retroactive concerns applying backward in time, unrelated to a present stance of confidence.

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