Find all School-related info fast with the new School-Specific MBA Forum

It is currently 18 Sep 2014, 14:20

Close

GMAT Club Daily Prep

Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized
for You

we will pick new questions that match your level based on your Timer History

Track
Your Progress

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History

Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.

Events & Promotions

Events & Promotions in June
Open Detailed Calendar

Rate of inflation

  Question banks Downloads My Bookmarks Reviews Important topics  
Author Message
3 KUDOS received
Director
Director
User avatar
Joined: 25 Oct 2006
Posts: 652
Followers: 7

Kudos [?]: 190 [3] , given: 6

GMAT Tests User
Rate of inflation [#permalink] New post 25 Sep 2008, 21:39
3
This post received
KUDOS
when the rate of inflation exceeds the rate of return on the most profitable investment available , the difference between the two rates will be the percentage, by which,at a minimum, the value of any investment will decline. If in such circumstance the value of a particular investment declines by more than that percentage, it must be true that ................

Which one logically completes the argument?

A. The rate of inflation has risen

B. The investment in question is becoming less profitable

C. The investment in question is less profitable than the most profitable investment available

D. The rate of return on the most profitable investment available has declined

E. There has been a change in which particular investment happens to be the most profitable

Can we discuss?
_________________

If You're Not Living On The Edge, You're Taking Up Too Much Space

Manager
Manager
avatar
Joined: 12 May 2006
Posts: 186
Followers: 1

Kudos [?]: 25 [0], given: 0

GMAT Tests User
Re: Rate of inflation [#permalink] New post 25 Sep 2008, 21:43
IMO B.
Manager
Manager
avatar
Joined: 24 Sep 2008
Posts: 106
Followers: 1

Kudos [?]: 4 [0], given: 0

Re: Rate of inflation [#permalink] New post 25 Sep 2008, 22:04
(A)
_________________

Kick GMAT ass

Intern
Intern
User avatar
Joined: 22 Jul 2008
Posts: 43
Followers: 1

Kudos [?]: 7 [0], given: 0

Re: Rate of inflation [#permalink] New post 25 Sep 2008, 22:34
priyankur_saha@ml.com wrote:
when the rate of inflation exceeds the rate of return on the most profitable investment available , the difference between the two rates will be the percentage, by which,at a minimum, the value of any investment will decline. If in such circumstance the value of a particular investment declines by more than that percentage, it must be true that ................

Which one logically completes the argument?
A. The rate of inflation has risen
B. The investment in question is becoming less profitable
C. The investment in question is less profitable than the most profitable investment available
D. The rate of return on the most profitable investment available has declined
E. There has been a change in which particular investment happens to be the most profitable

Can we discuss?


IMO "C"
"A" is not possible because nowhere the author has mentioned a link b/n inflation rise/decline
he/she just talks about the rate of inflation
"B" could be the answer but if you "C" you will find that "C" can definitly be derived from the question "most profitable" Vs "investment in question "
Similarly i am not able to find a link of "D" and "E" with the question
_________________

Nik...
Score Big
time is Less WORK is more

1 KUDOS received
Director
Director
User avatar
Joined: 25 Oct 2006
Posts: 652
Followers: 7

Kudos [?]: 190 [1] , given: 6

GMAT Tests User
Re: Rate of inflation [#permalink] New post 25 Sep 2008, 22:42
1
This post received
KUDOS
nikhiljain05:
The premise states that in such circumstance the value of a particular investment declines by more than that percentage.

Therefore the percentage was ok before and now it declined from its previous mark, Can't we say it was profitable before and now became less profitable? Obviously, if rate of return declines, the profitability will diminish consequently.
_________________

If You're Not Living On The Edge, You're Taking Up Too Much Space

Manager
Manager
avatar
Joined: 27 Aug 2008
Posts: 150
Followers: 0

Kudos [?]: 30 [0], given: 0

Re: Rate of inflation [#permalink] New post 25 Sep 2008, 23:50
priyankur_saha@ml.com wrote:
when the rate of inflation exceeds the rate of return on the most profitable investment available , the difference between the two rates will be the percentage, by which,at a minimum, the value of any investment will decline. If in such circumstance the value of a particular investment declines by more than that percentage, it must be true that ................

Which one logically completes the argument?

A. The rate of inflation has risen

B. The investment in question is becoming less profitable

C. The investment in question is less profitable than the most profitable investment available

D. The rate of return on the most profitable investment available has declined

E. There has been a change in which particular investment happens to be the most profitable

Can we discuss?


IMO D.

Decline = (RoI - RoR)/RoR * 100

If RoI doesnt increase any further, & % has increased that means the denominator i.r. RoR has reduced. Simple math sense!
1 KUDOS received
Intern
Intern
User avatar
Joined: 22 Jul 2008
Posts: 43
Followers: 1

Kudos [?]: 7 [1] , given: 0

Re: Rate of inflation [#permalink] New post 26 Sep 2008, 00:00
1
This post received
KUDOS
priyankur_saha@ml.com wrote:
nikhiljain05:
The premise states that in such circumstance the value of a particular investment declines by more than that percentage.

Therefore the percentage was ok before and now it declined from its previous mark, Can't we say it was profitable before and now became less profitable? Obviously, if rate of return declines, the profitability will diminish consequently.


For priyankur_saha@ml.com
it says that a "value of a particular investment"
not "% of highest profitable investment"
so only the value for that particular investment has decreased
_________________

Nik...
Score Big
time is Less WORK is more

SVP
SVP
avatar
Joined: 17 Jun 2008
Posts: 1579
Followers: 12

Kudos [?]: 183 [0], given: 0

GMAT Tests User
Re: Rate of inflation [#permalink] New post 26 Sep 2008, 00:39
Another C with the similar explanation as below.

nikhiljain05 wrote:
priyankur_saha@ml.com wrote:
nikhiljain05:
The premise states that in such circumstance the value of a particular investment declines by more than that percentage.

Therefore the percentage was ok before and now it declined from its previous mark, Can't we say it was profitable before and now became less profitable? Obviously, if rate of return declines, the profitability will diminish consequently.


For priyankur_saha@ml.com
it says that a "value of a particular investment"
not "% of highest profitable investment"
so only the value for that particular investment has decreased
Senior Manager
Senior Manager
avatar
Joined: 06 Apr 2008
Posts: 452
Followers: 1

Kudos [?]: 48 [0], given: 1

Re: Rate of inflation [#permalink] New post 26 Sep 2008, 03:22
priyankur_saha@ml.com wrote:
when the rate of inflation exceeds the rate of return on the most profitable investment available , the difference between the two rates will be the percentage, by which,at a minimum, the value of any investment will decline. If in such circumstance the value of a particular investment declines by more than that percentage, it must be true that ................

Which one logically completes the argument?

A. The rate of inflation has risen

B. The investment in question is becoming less profitable

C. The investment in question is less profitable than the most profitable investment available

D. The rate of return on the most profitable investment available has declined

E. There has been a change in which particular investment happens to be the most profitable

Can we discuss?


IMO C)
Manager
Manager
avatar
Joined: 14 Jan 2006
Posts: 92
Schools: HKUST
Followers: 1

Kudos [?]: 28 [0], given: 0

GMAT Tests User
Re: Rate of inflation [#permalink] New post 26 Sep 2008, 07:29
clear C
VP
VP
User avatar
Joined: 05 Jul 2008
Posts: 1436
Followers: 33

Kudos [?]: 217 [0], given: 1

GMAT Tests User
Re: Rate of inflation [#permalink] New post 26 Sep 2008, 07:38
priyankur_saha@ml.com wrote:
when the rate of inflation exceeds the rate of return on the most profitable investment available , the difference between the two rates will be the percentage, by which,at a minimum, the value of any investment will decline. If in such circumstance the value of a particular investment declines by more than that percentage, it must be true that ................

Which one logically completes the argument?

A. The rate of inflation has risen

B. The investment in question is becoming less profitable

C. The investment in question is less profitable than the most profitable investment available

D. The rate of return on the most profitable investment available has declined

E. There has been a change in which particular investment happens to be the most profitable

Can we discuss?


Holly Molly. All over the place.

B is good but C is the best. the word minimum is the key. Any investment will lose the minimum X percent. But if there are investments that decline by X+N percent it must be true that such investments are less profitable than the most profitable investment available.
1 KUDOS received
Director
Director
User avatar
Joined: 25 Oct 2006
Posts: 652
Followers: 7

Kudos [?]: 190 [1] , given: 6

GMAT Tests User
Re: Rate of inflation [#permalink] New post 26 Sep 2008, 21:03
1
This post received
KUDOS
Thanks of the explanations. OA is C indeed.
_________________

If You're Not Living On The Edge, You're Taking Up Too Much Space

Re: Rate of inflation   [#permalink] 26 Sep 2008, 21:03
    Similar topics Author Replies Last post
Similar
Topics:
When the rate of inflation exceeds the rate of return on the vineetgupta 7 04 Apr 2007, 03:54
Last year the rate of inflation was 1.2 percent, but for the sperinko 6 20 Aug 2006, 06:05
Last year the rate of inflation was 1.2 percent, but for the Darth_McDaddy 8 13 Sep 2005, 07:11
When the rate of inflation exceeds the rate of return on the WinWinMBA 9 14 Jun 2005, 12:04
Last year the rate of inflation was 1.2%, but for the Taku 11 10 Apr 2005, 02:47
Display posts from previous: Sort by

Rate of inflation

  Question banks Downloads My Bookmarks Reviews Important topics  


GMAT Club MBA Forum Home| About| Privacy Policy| Terms and Conditions| GMAT Club Rules| Contact| Sitemap

Powered by phpBB © phpBB Group and phpBB SEO

Kindly note that the GMAT® test is a registered trademark of the Graduate Management Admission Council®, and this site has neither been reviewed nor endorsed by GMAC®.