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When the rate of inflation exceeds the rate of return on the [#permalink]
 21 Dec 2003, 01:02
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When the rate of inflation exceeds the rate of return on the most profitable investment available, the difference between those two rates will be the percentage by which, at a minimum, the value of any investment will decline. If in such a circumstance the value of a particular investment declines by more than that percentage, it must be true that_________________________.
Which one of the following 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 available
i got this wrong.
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very tough one, definitely took me more than 2 minutes but i would say B although i'm totally sure
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I opt for C, a rather easy question...
If the value of a particular investment declines by more than a minimum for the most profitable investment, then the investment in question is LESS profitable.
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ok.. whats wrong with D?
My equation was...
rate of inflation - rate of return = % by which value of any investment will decline
now if "Rate of return" has declined that means right side will increase. right?
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C
mbamantra wrote:
Quote: ok.. whats wrong with D?
The premise says " the value of a particular investment"
D says " the rate of return on the most profitable investment ...."
How can something that is happening to a 'particular' investment affect the 'most' profitable investment? they are two different investments ... a change in one will NOT DIRECTLY affect the other ... there will be a relative change between the two, as suggested by C, but not an actual change in the other as stated in D
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Re: CR:Inflation & rate of return [#permalink]
21 Dec 2003, 17:29
mbamantra wrote: When the rate of inflation exceeds the rate of return on the most profitable investment available, the difference between those two rates will be the percentage by which, at a minimum, the value of any investment will decline. If in such a circumstance the value of a particular investment declines by more than that percentage, it must be true that_________________________.
Which one of the following 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 available
i got this wrong.
D is best.
the above situation is only possible when D has happened
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Ans is C
My 2 cents. I feel that D is beyond the scope. It might be correct in the overall scenario, but C is more closer to the question asked. In other words it (choice C) seems to provide a more direct link, unlike D.
Please comment.
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Agree with C.
D seems to be wrong because whatever happens with investment under question it has nothing to do with return of another investment.
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Re: CR:Inflation & rate of return [#permalink]
03 Jun 2010, 11:09
I dont catch this one. Could anyone explain further? Thanks.
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Re: CR:Inflation & rate of return [#permalink]
05 Jun 2010, 10:52
if the rate of return is > than the rate of return on most profitable investment then the difference between 2 rates (rate of inflation - rate of return, lets say 3) will be percentage (3%) by which the value, at a minimum, of the most profitable investment will decline. (so the value of the most proftable investment will decline by 3% at a minimum)
So if the value of some XYZ investment declines more than that percentage (3%) then it means that the XYZ investment is less profitable than the most profitable investment
A) the rate of inflation has risen - so what?
B) the investment in question is becoming less profitable - we know that
C) the investment in question is less profitable than the most profitable investment available - correct
D) the rate of return on the most profitable investment available has declined - we are talking about the particular investment
E) there has been a change in which particular investment happens to be the most profitable available - makes no sense
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Re: CR:Inflation & rate of return [#permalink]
05 Jun 2010, 21:52
So what is OA?
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Re: CR:Inflation & rate of return
[#permalink]
05 Jun 2010, 21:52
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