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Which of the following best completes the passage below? As

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Which of the following best completes the passage below? As [#permalink] New post 10 Sep 2005, 04:44
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A
B
C
D
E

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Which of the following best completes the passage below?

As long as savings deposits are insured by the government, depositors will have no incentive to evaluate the financial strength of a savings bank. Yield alone will influence their choice of bank. To attract deposits, banks will be forced to offer the highest possible interest rates. And since paying higher rates inevitably strains the financial strength of a bank, ______

(A) the government will be forced o impose limitations on interest rates
(B) deposit insurance will ultimately lead to the financial weakening of many banks
(C) savers will be forced to choose between deposit insurance and higher interest rates
(D) deposits will tend to go to the banks with the greatest financial strength
(E) bank profits will tend to rise to ever-higher levels
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 [#permalink] New post 10 Sep 2005, 04:48
Looks D to me.
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 [#permalink] New post 10 Sep 2005, 12:29
D it is.....
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 [#permalink] New post 10 Sep 2005, 13:07
B for me
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 [#permalink] New post 10 Sep 2005, 15:19
If interest rates are the only way banks can compete, it will inevitably cause banks to over extend themselves in an attempt to attract deposits. I would say B.
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 [#permalink] New post 10 Sep 2005, 15:22
B.
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 [#permalink] New post 11 Sep 2005, 01:55
My answer is "B".

"D" doesn't match with the "And since paying higher rates inevitably strains the financial strength of a bank,"
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 [#permalink] New post 12 Sep 2005, 08:13
I think the answer is A.

Let me know your inputs.
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 [#permalink] New post 12 Sep 2005, 10:56
I'll go with A. It talks about the interest rate.

To attract deposits, banks will be forced to offer the highest possible interest rates. And since paying higher rates inevitably strains the financial strength of a bank the government will be forced to impose limitations on interest rates
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 [#permalink] New post 13 Sep 2005, 01:28
A uses extreme language. My money is on D.
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 [#permalink] New post 13 Sep 2005, 01:34
OA please!
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 [#permalink] New post 13 Sep 2005, 01:56
Id go with D too!
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 [#permalink] New post 13 Sep 2005, 06:22
B for me
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Re: CR 2-33 [#permalink] New post 13 Sep 2005, 15:14
(B)

1. Government insures deposit.
2. so, banks will be forced to increase rates to attract customers.
3. and this strains the financial strength of the banks.

=> deposit insurance will ultimately lead to the financial weakening of many banks
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 [#permalink] New post 13 Sep 2005, 15:25
B.

go "just a notch" above the premises in the argument. A is leap-frogging.
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 [#permalink] New post 17 Sep 2005, 02:42
D for me.

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  [#permalink] 17 Sep 2005, 02:42
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Which of the following best completes the passage below? As

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