Sample Test - Reading Comprehension - CAT 2013

MARK HUGHES is a master o the ine art o s!r"i"al# His $os Angeles-%ased Her%alie
&nternational &n'# is a p(ramid o!tit that peddles )eight-loss and n!trition 'on'o'tions o d!%io!s
"al!e# *ad p!%li'it( and reg!lator( 'ra'+do)ns h!rt his U#S# %!siness in the late 1,-0s# *!t
H!ghes. /1. 'ontin!es to en0o( a l!1!rio!s liest(le in a 220 million *e"erl( Hills mansion# He has
%een sharing the pad and a (a'ht )ith his third )ie. a ormer Miss 3etite U#S#A# He 'an inan'e
this la"ish liest(le 0!st on his salar( and %on!s. )hi'h last (ear 'ame to 24#3 million#
He s!r"i"ed his tro!%les in the U#S# %( mo"ing o"erseas. )here reg!lators are less 5ealo!s and
'ons!mers e"en more nai"e. at least initiall(# Toda( 446 o Her%alie retail sales deri"e rom
o"erseas# &ts ne) pro)ling gro!nds7 Asia and R!ssia# $ast (ear Her%alie8s net earnings do!%led.
to 2/9 million. on net sales o 2:32 million# *ased on Her%alie8s ;asda<-traded sto'+. the
'ompan( has a mar+et 'apitali5ation o 24,0 million. ma+ing H!ghes8 9-6 )orth 2/9/ million#
There8s a )orm. tho!gh. in H!ghes8 apple# =oreigners aren8t st!pid# &n the end the( +no) )hen
the(8"e %een had# &n =ran'e. or instan'e. retail sales rose to 2,4 million %( 1,,3 and then
pl!nged to 212 million last (ear# &n German( sales hit 219, million in 1,,/ and ha"e sin'e
dropped to 29/ million#
3erhaps a)are that the )orld ma( not pro"ide an ininite s!ppl( o s!'+ers. H!ghes )anted to
!nload some o his shares# *!t in Mar'h. ater Her%alie8s sto'+ 'ollapsed. he p!t o a plan to
d!mp a%o!t a third o his holdings on the p!%li'#
Contri%!ting to H!ghes8 )oes. Her%alie8s 'hie 'o!nsel and legal atta'+ dog. >a"id Addis. <!it in
?an!ar(# *eore pa'+ing !p. he reportedl( %ello)ed at H!ghes. @& 'an8t prote't (o! an(more#A
Addis. )ho sa(s he )ants to spend more time )ith his amil(. 'h!'+les and 'laims attorne(-'lient
pri"ilege#
Tro!%le on the home ront. too# Bn a re'ent 'oneren'e 'all )ith distri%!tors. H!ghes re"ealed
he8s di"or'ing his )ie. S!5an. )hose %eaming and per+( image adorns m!'h o Her%alie8s
literat!re#
Mean)hile. in a la)s!it that8s %een <!ietl( mo"ing thro!gh Ari5ona8s S!perior Co!rt. ormer
Her%alie distri%!tor >aniel =allo) o Sandpoint. &daho 'harges that Her%alie ar%itraril( )ithholds
pa(ment to distri%!tors and mar+s !p its prod!'ts o"er se"en times the 'ost o man!a't!ring#
=allo) also 'laims H!ghes )anted to !se the R!ssian maia to gain entr( to that nation8s mar+et#
=allo) himsel is no angel. %!t his la)s!it. )hi'h )as posted on the &nternet. %ro!ght o!t other
'omplaints# Rand( Co1 o $e)iston. &daho sa(s Her%alie @destro(ed m( %!sinessA ater he and
his )ie 'omplained to the 'ompan( that the( )ere %eing 'heated o!t o their mone( %( higher-
!ps in the p(ramid organi5ation#
Cill H!ghes s!r"i"e againD >on8t 'o!nt on it this time#
1# Her%alie &n' is %ased in7
E1F $os Angeles
E2F Col!m%!s
E3F ;e) Gor+
E/F A!stin

2# >aniel =allo)7
E1F Cas a ormer attorne( or H!ghes
E2F Cas a ormer distri%!tor o Her%alie
E3F Co-o!nded Her%alie
E/F Ran Her%alie8s German !nit

3# Chi'h o the ollo)ing 'o!ntries is mentioned )here H!ghes operated Her%alieD
E1F &ndia
E2F China
E3F German(
E/F U+raine

/# The 'omplaint o Rand( Co1 o $e)iston. &daho. against Her%alie )as7
E1F The 'ompan( did not pa( them their d!es
E2F The prod!'ts s!pplied %( H!ghes )ere inerior
E3F Their higher-!ps in the p(ramid 'heated them
E/F H!ghes had 'onne'tions )ith the R!ssian maia

9# Chi'h o the ollo)ing 'o!ntries is ;BT mentioned in the passageD
E1F R!ssia
E2F USA
E3F =ran'e
E/F &tal(

:# &n the (ear in )hi'h H!ghes8 salar( and %on!ses 'ame to US2 4#3 million. )hat )as the
retail sales or Her%alie in =ran'eD
E1F 212 million
E2F 219, million
E3F 29/ million
E/F 2,4 million

4# At the time )hen this arti'le )as )ritten. i Her%alie had had a mar+et 'apitalisation o 2
1 %illion. )hat )o!ld ha"e %een H!ghes8 shareD
E1F 2/20 million
E2F 29-0 million
E3F 2129 million
E/F 2900 million
Ans)er Ke(
E1F 1 E9F /
E2F 2 E:F 1
E3F 3 E4F 2
E/F 3