It is currently 20 Nov 2017, 14:34

### 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

we will pick new questions that match your level based on your Timer History

Track

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History

# Events & Promotions

###### Events & Promotions in June
Open Detailed Calendar

# Connsumers in California seeking personal loans have fewer

Author Message
Manager
Joined: 30 Mar 2007
Posts: 177

Kudos [?]: 44 [0], given: 0

Connsumers in California seeking personal loans have fewer [#permalink]

### Show Tags

07 May 2007, 21:13
00:00

Difficulty:

(N/A)

Question Stats:

63% (02:49) correct 38% (02:11) wrong based on 36 sessions

### HideShow timer Statistics

Connsumers in California seeking personal loans have fewer banks to turn than do consumers elsewhere in the US. This shortage of competion among banks explains why interest rates on personal loans in California are higher than in any other region of the US.
Which of the following, if true, most substantially weakens the conclusion above?

A. Because of the comparatively high wayes they must pay to attract qualified workers, California banks charge depositors more than banks elsewhere do for many of the services they offer.
B. Personal loans are risker than other types of loans, such as home mortgage loans, that banks make.
C. Since bank deposits in California are covered by the same type of insurnance that guarentees bank deposit in other parts of the United States, they are no less secure than deposits elsewhere
D. The proportion of consumers who default on their personal loans is lower in California than in any other region of the US
E. Interest rates paid by California banks to depositors are lower than those paid by banks in other parts of the US because in California there is less competition to attract depositors

In the passage, does the shortage of competition among banks mean that there is no competition? I am a bit confused

Kudos [?]: 44 [0], given: 0

Manager
Joined: 25 May 2011
Posts: 147

Kudos [?]: 75 [0], given: 71

Re: Connsumers in California seeking personal loans have fewer [#permalink]

### Show Tags

19 Dec 2011, 09:51
I went to A
what's OA?

Kudos [?]: 75 [0], given: 71

BSchool Forum Moderator
Status: Flying over the cloud!
Joined: 17 Aug 2011
Posts: 888

Kudos [?]: 735 [0], given: 44

Location: Viet Nam
GMAT Date: 06-06-2014
GPA: 3.07
Re: Connsumers in California seeking personal loans have fewer [#permalink]

### Show Tags

19 Dec 2011, 10:05
I will go with A. Furthermore, shortage of competition does not mean no competition, but mean lack of competition.
_________________

Rules for posting in verbal gmat forum, read it before posting anything in verbal forum
Giving me + 1 kudos if my post is valuable with you

The more you like my post, the more you share to other's need

CR: Focus of the Week: Must be True Question

Kudos [?]: 735 [0], given: 44

Senior Manager
Joined: 19 Apr 2011
Posts: 274

Kudos [?]: 381 [0], given: 51

Schools: Booth,NUS,St.Gallon
Re: Connsumers in California seeking personal loans have fewer [#permalink]

### Show Tags

21 Dec 2011, 01:26
I go with A
_________________

+1 if you like my explanation .Thanks

Kudos [?]: 381 [0], given: 51

Senior Manager
Joined: 13 Aug 2010
Posts: 280

Kudos [?]: 36 [0], given: 1

Re: Connsumers in California seeking personal loans have fewer [#permalink]

### Show Tags

21 Dec 2011, 04:19
A. Because of the comparatively high wayes they must pay to attract qualified workers, California banks charge depositors more than banks elsewhere do for many of the services they offer.
-- interest rates are high as expenditure is high, correct !
B. Personal loans are risker than other types of loans, such as home mortgage loans, that banks make.
-- this can imply to other states too, this is out.
C. Since bank deposits in California are covered by the same type of insurnance that guarentees bank deposit in other parts of the United States, they are no less secure than deposits elsewhere
-- this supports, hence out
D. The proportion of consumers who default on their personal loans is lower in California than in any other region of the US
-- out of scope.
E. Interest rates paid by California banks to depositors are lower than those paid by banks in other parts of the US because in California there is less competition to attract depositors
-- irrelevant.

Kudos [?]: 36 [0], given: 1

Director
Joined: 28 Jul 2011
Posts: 518

Kudos [?]: 304 [0], given: 16

Location: United States
GPA: 3.86
WE: Accounting (Commercial Banking)
Re: Connsumers in California seeking personal loans have fewer [#permalink]

### Show Tags

21 Dec 2011, 04:39
With A
_________________

Kudos [?]: 304 [0], given: 16

Intern
Joined: 12 Nov 2011
Posts: 49

Kudos [?]: 12 [0], given: 1

GMAT Date: 12-15-2011
Re: Connsumers in California seeking personal loans have fewer [#permalink]

### Show Tags

21 Dec 2011, 21:28
IMO A
A show off an alternative cause

Kudos [?]: 12 [0], given: 1

Manager
Joined: 11 Dec 2011
Posts: 54

Kudos [?]: 11 [0], given: 7

Location: Malaysia
Concentration: Nonprofit, Sustainability
GMAT 1: 730 Q49 V40
GPA: 3.16
WE: Consulting (Computer Software)
Re: Connsumers in California seeking personal loans have fewer [#permalink]

### Show Tags

22 Dec 2011, 00:34
acdbe2003 wrote:
IMO A
A show off an alternative cause

same reasoning... A

Kudos [?]: 11 [0], given: 7

Manager
Joined: 07 Aug 2011
Posts: 169

Kudos [?]: 24 [0], given: 6

Location: United States
GMAT 1: 690 Q48 V37
Re: Connsumers in California seeking personal loans have fewer [#permalink]

### Show Tags

26 Dec 2011, 08:34
So we need to counter the argument and state that its not due to lack of completion but some other reason for high interest rate

Only A provides an alternative reason for high interest rate

Kudos [?]: 24 [0], given: 6

Re: Connsumers in California seeking personal loans have fewer   [#permalink] 26 Dec 2011, 08:34
Display posts from previous: Sort by

# Connsumers in California seeking personal loans have fewer

Moderators: GMATNinjaTwo, GMATNinja

 Powered by phpBB © phpBB Group | Emoji artwork provided by EmojiOne Kindly note that the GMAT® test is a registered trademark of the Graduate Management Admission Council®, and this site has neither been reviewed nor endorsed by GMAC®.