Forum Home > GMAT > Quantitative > Problem Solving (PS)
Events & Promotions
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
Track
Your Progress
Practice
Pays
Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.
Sep 2001:00 PM EDT
-02:00 PM EDT
Have you ever wondered how to score a PERFECT 805 on the GMAT? Meet Julia, a banking professional who used the Target Test Prep course to achieve this incredible feat. Julia's story is nothing short of an inspiration.
Sep 2008:00 PM EDT
-11:59 PM EDT
For a limited time only, get 20% off our game-changing GMAT self-study plans and live online classes. Use the coupon code FLASH20 at checkout to save up to $320.
Sep 2105:30 AM PDT
-07:30 AM PDT
Not only the typical inference questions but also all other CR questions on the GMAT require the ability to deduce from the given information. Come master how to draw inferences accurately and efficiently with Verbal Expert-Sunita Singhvi. Limited Seats!
Sep 2111:00 AM IST
-01:00 PM IST
Attend this session to learn how to Deconstruct arguments, Pre-Think Author’s Assumptions, and apply Negation Test.
Sep 2108:00 PM PDT
-09:00 PM PDT
Full-length FE mock with insightful analytics, weakness diagnosis, and video explanations!
Sep 2205:30 AM PDT
-07:30 AM PDT
Unlock GMAT success! Join our webinar for exclusive insights on scoring V85+ in the Verbal section. Proven strategies, expert tips, and essential focus to elevate your GMAT game. Register now for the ultimate Verbal mastery!
Sep 2210:00 AM EDT
-11:00 AM EDT
More and more TTP students are earning impressive scores on the GMAT. Now is the perfect time to join the many GMAT students who made the switch to TTP and surpassed their wildest expectations on test day.- Sep 22
11:00 AM IST
-01:00 PM IST
Attend this free GMAT Algebra Webinar and learn how to master the most challenging Inequalities and Absolute Value problems with ease. 
Sep 2701:00 PM EDT
-11:59 PM EDT
Save 20% on Target Test Prep and get a perfect score like Julia. Through Monday, September 30, get an EXTRA 20% OFF any Target Test Prep GMAT plan by using the coupon code FLASH20 at checkout.
Any lender about to make a loan wishes to know the real rate of intere
[#permalink]
26 Jul 2019, 13:13
26 Jul 2019, 13:13
1
Kudos
3
Bookmarks
Top Contributor
Show timer
00:00
A
B
C
D
E
Difficulty:
45%
(medium)
Question Stats:
70% (02:05) correct
30%
(02:31)
wrong
based on 300
sessions
Any lender about to make a loan wishes to know the real rate of interest; i.e., ,the contractual rate of interest less the rate of inflation. But what rate of inflation to use, past or expected? Past inflation is the better choice because we have specific firm figures for.it so that the real rate of interest will also emerge as a specific figure.
Which of the following, if true, is the strongest point that an opponent of the position above might make in arguing that the rate of expected inflation is the proper figure to use?
(A) Since the contractual interest is future income to a prospective lender, it is more appropriate to adjust that income in terms of inflation expected for the future.
(B) Since estimating the rate of expected inflation presupposes careful economic analysis, lenders might derive coincidental benefits from doing such an estimate.
(C) The rate of expected inflation will differ little from the rate of past inflation when inflation is steady.
(D) No official rate of past inflation is computed for any period shorter than a month.
(E) The official rate of past inflation is a figure that depends on what commodities, in what proportions, determine the official price index.
Which of the following, if true, is the strongest point that an opponent of the position above might make in arguing that the rate of expected inflation is the proper figure to use?
(A) Since the contractual interest is future income to a prospective lender, it is more appropriate to adjust that income in terms of inflation expected for the future.
(B) Since estimating the rate of expected inflation presupposes careful economic analysis, lenders might derive coincidental benefits from doing such an estimate.
(C) The rate of expected inflation will differ little from the rate of past inflation when inflation is steady.
(D) No official rate of past inflation is computed for any period shorter than a month.
(E) The official rate of past inflation is a figure that depends on what commodities, in what proportions, determine the official price index.
Board of Directors
Joined: 11 Jun 2011
Status:QA & VA Forum Moderator
Posts: 6041
Given Kudos: 463
Location: India
GPA: 3.5
WE:Business Development (Commercial Banking)
Re: Any lender about to make a loan wishes to know the real rate of intere
[#permalink]
01 Aug 2019, 12:31
01 Aug 2019, 12:31
1
Kudos
carcass
Any lender about to make a loan wishes to know the real rate of interest; i.e., ,the contractual rate of interest less the rate of inflation. But what rate of inflation to use, past or expected? Past inflation is the better choice because we have specific firm figures for.it so that the real rate of interest will also emerge as a specific figure.
Which of the following, if true, is the strongest point that an opponent of the position above might make in arguing that the rate of expected inflation is the proper figure to use?
(A) Since the contractual interest is future income to a prospective lender, it is more appropriate to adjust that income in terms of inflation expected for the future.
(B) Since estimating the rate of expected inflation presupposes careful economic analysis, lenders might derive coincidental benefits from doing such an estimate.
(C) The rate of expected inflation will differ little from the rate of past inflation when inflation is steady.
(D) No official rate of past inflation is computed for any period shorter than a month.
(E) The official rate of past inflation is a figure that depends on what commodities, in what proportions, determine the official price index.
Which of the following, if true, is the strongest point that an opponent of the position above might make in arguing that the rate of expected inflation is the proper figure to use?
(A) Since the contractual interest is future income to a prospective lender, it is more appropriate to adjust that income in terms of inflation expected for the future.
(B) Since estimating the rate of expected inflation presupposes careful economic analysis, lenders might derive coincidental benefits from doing such an estimate.
(C) The rate of expected inflation will differ little from the rate of past inflation when inflation is steady.
(D) No official rate of past inflation is computed for any period shorter than a month.
(E) The official rate of past inflation is a figure that depends on what commodities, in what proportions, determine the official price index.
Real ROI = Contractual ROi - Inflation Rate
Now the problem regarding the use of Inflation Rate depends on the Highlighted part of the stimulus ( Using specific figure terms for past Inflation Rate ) rather than future inflation rate....
Prethink we have 2 instantly -
1. Past Inflation rate keeps changing ( Which one to take Inflation rOI for past year/Month/Quarter etc.....)
2. Future rate can be predicted reasonably.
(A) Clearly talks in line of our point No 2. and is hence the strongest point that an opponent of the position above might make....
Joined: 28 Jan 2017
Posts: 198
Given Kudos: 186
GMAT 1: 720 Q50 V36
WE:Consulting (Computer Software)
Re: Any lender about to make a loan wishes to know the real rate of intere
[#permalink]
07 Aug 2019, 06:28
07 Aug 2019, 06:28
Abhishek009
carcass
Any lender about to make a loan wishes to know the real rate of interest; i.e., ,the contractual rate of interest less the rate of inflation. But what rate of inflation to use, past or expected? Past inflation is the better choice because we have specific firm figures for.it so that the real rate of interest will also emerge as a specific figure.
Which of the following, if true, is the strongest point that an opponent of the position above might make in arguing that the rate of expected inflation is the proper figure to use?
(A) Since the contractual interest is future income to a prospective lender, it is more appropriate to adjust that income in terms of inflation expected for the future.
(B) Since estimating the rate of expected inflation presupposes careful economic analysis, lenders might derive coincidental benefits from doing such an estimate.
(C) The rate of expected inflation will differ little from the rate of past inflation when inflation is steady.
(D) No official rate of past inflation is computed for any period shorter than a month.
(E) The official rate of past inflation is a figure that depends on what commodities, in what proportions, determine the official price index.
Which of the following, if true, is the strongest point that an opponent of the position above might make in arguing that the rate of expected inflation is the proper figure to use?
(A) Since the contractual interest is future income to a prospective lender, it is more appropriate to adjust that income in terms of inflation expected for the future.
(B) Since estimating the rate of expected inflation presupposes careful economic analysis, lenders might derive coincidental benefits from doing such an estimate.
(C) The rate of expected inflation will differ little from the rate of past inflation when inflation is steady.
(D) No official rate of past inflation is computed for any period shorter than a month.
(E) The official rate of past inflation is a figure that depends on what commodities, in what proportions, determine the official price index.
Real ROI = Contractual ROi - Inflation Rate
Now the problem regarding the use of Inflation Rate depends on the Highlighted part of the stimulus ( Using specific figure terms for past Inflation Rate ) rather than future inflation rate....
Prethink we have 2 instantly -
1. Past Inflation rate keeps changing ( Which one to take Inflation rOI for past year/Month/Quarter etc.....)
2. Future rate can be predicted reasonably.
(A) Clearly talks in line of our point No 2. and is hence the strongest point that an opponent of the position above might make....
What is the issue with B?
