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A prolonged period of low mortgage rates resulted in a

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Manager
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A prolonged period of low mortgage rates resulted in a [#permalink]

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16 Sep 2005, 05:46
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A prolonged period of low mortgage rates resulted in a period of the most robust home sales ever. At the same time, the average sale price of resale homes actually dropped, when adjusted for inflation.

Which of the following, if true, would explain the apparent contradition between the robust home sales and the drop in the average sale price of resale homes?

(A) The inflation rate during this period exceeded the increase in the average salary, thus preventing many buyers from securing mortgages.
(B) Resale homes represent the best value on the real estate market.
(C) Without adjustment for inflation, the price of resale homes actually increased by a very slight amount.
(D) The decrease in mortgage rates was accompanied by a widening of the types of mortgages from which borrowers could choose.
(E) The increase in home sales was due entirely to an increase in the sale of new homes.
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Manager
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16 Sep 2005, 07:04
i did not understand the passage much coz of its technical stuff but came down to C & E and i take E.
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only if i could choose....

Manager
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16 Sep 2005, 07:20
I will go with C
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16 Sep 2005, 08:09
This is probably E

The increase in home sales was due entirely to an increase in the sale of new homes. This statement supports the fact that there was a boom in the
home sales and not in resale homes.

B and C are out of scope.
A doesn't explain the increase in sale
Director
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16 Sep 2005, 09:53
macca wrote:
This is probably E

The increase in home sales was due entirely to an increase in the sale of new homes. This statement supports the fact that there was a boom in the
home sales and not in resale homes.

B and C are out of scope.
A doesn't explain the increase in sale

Agree with you, Macca, the answer is E.
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16 Sep 2005, 10:20
E should be the right answer choice.

I agree with macca.
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16 Sep 2005, 11:09
shud be E.
but seems like its too easy.....

Krishna
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16 Sep 2005, 13:02
I like E here too. It explains why the prices went down.
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16 Sep 2005, 20:30
E it is!

If E is right then, the sale boom is only for the new houses and the resale houses are not part of the boom - low demand and lower prices!
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17 Sep 2005, 13:43
E.

GA
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18 Sep 2005, 14:07
E is obvious.
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hey ya......

Director
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18 Sep 2005, 14:41
A prolonged period of low mortgage rates resulted in a period of the most robust home sales ever. At the same time, the average sale price of resale homes actually dropped, when adjusted for inflation.

Which of the following, if true, would explain the apparent contradition between the robust home sales and the drop in the average sale price of resale homes?

Leaving A, B and D aside, I have to choose between C and E. It's stated that a period of robust homes sales is occurring and that hte average price of resale dome has actually dropped, when adjusting for inflation. As nothing is stated about new homes sales, I have to choose C.
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18 Sep 2005, 21:57
I choose E.

OA please.....Please do post OA for every question you put on this forum.
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19 Sep 2005, 13:26
again sorry for the delay with the OA's...didn't get around to posting on the weekend

The OA is E
19 Sep 2005, 13:26
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