Just a friendly reminder to please please please include the source whenever you post a new question! Looks like this one is from GMAT for Dummies?
Responding to a PM:
Quote:
Option A cannot be eliminated just because which always refer to non-essential modifier right?? (which without comma can refer to essential modifier)
"This sentence correction question has an improperly used pronoun. You use which to introduce nonessential clauses. Because the information after the which is essential to the meaning of the sentence, you have to use that instead"---->Part of Official explanation
In this case, I think that the official explanation is basically correct. (Though you're always MUCH better off relying on official GMAT questions!) The underlined modifying phrase ("which were previously unknown" or "that were previously unknown") is clearly essential information: without it, it would be really hard to understand what sort of financing we're talking about, and the sentence wouldn't make much sense. For an essential modifier, you'll always use "that" (without a comma); for non-essential modifiers, use "which" -- and "which" is always preceded by a comma when used at the beginning of a non-essential modifier.
I wouldn't worry too much about the distinction between essential and non-essential modifiers, though. I can think of a few official GMAT SC questions that include both "which" and "that" in the answer choices, but the distinction between "which" and "that" is rarely the deciding factor on official questions. Actually, I don't think that it's ever the deciding factor on any official GMAT questions -- but maybe I'm missing one somewhere. Either way, don't lose too much sleep over this.