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09 Aug 2020, 03:17
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Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
75%
(hard)
Question Stats:
52% (01:52) correct
48%
(02:15)
wrong
based on 268
sessions
History
Date
Time
Result
Not Attempted Yet
In 2019, after the Federal Reserve signalled that it was suspending plans to push interest rates higher, gold mounted another ascent. Historically, gold has done best when interest rates fall below the rate of inflation. __________________
Which of the following most logically completes the passage above?
A) Thus, the interest rates greatly affected the season which led to a rise in great number of investors.
B) Gold proved to be a disposable income for many buyers because they started owning it in great quantities.
C) As the inflation-adjusted return turns negative, investors feel comfortable owning gold as a store of value, even if it yields nothing.
D) Due to this, inflation played a major role in the investors’ buying decisions.
E) The rate of return did not fail to prominently surge the investors, who played a major role in buying gold.
Which of the following most logically completes the passage above?
A) Thus, the interest rates greatly affected the season which led to a rise in great number of investors.
B) Gold proved to be a disposable income for many buyers because they started owning it in great quantities.
C) As the inflation-adjusted return turns negative, investors feel comfortable owning gold as a store of value, even if it yields nothing.
D) Due to this, inflation played a major role in the investors’ buying decisions.
E) The rate of return did not fail to prominently surge the investors, who played a major role in buying gold.
yashikaaggarwal
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30 Aug 2020, 10:58
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In 2019, after the Federal Reserve signaled that it was suspending plans to push interest rates higher, gold mounted another ascent. Historically, gold has done best when interest rates fall below the rate of inflation. __________________
From the passage we can infer the importance of Gold in the economy, it surges high whenever country face the problem of inflation and interest rate falls below the said inflation rate. We have to find an option which justifies the role of gold in an economy.
A) Thus, the interest rates greatly affected the season which led to a rise in great number of investors.(the gold is not a focal point here, nor its specifically mentioned that investors are in for investing in gold, Broad scope)(Irrelevant)
B) Gold proved to be a disposable income for many buyers because they started owning it in great quantities. (if all started purchasing Gold, that means its not surging high in value, the aim behind correcting inflation is to take out unnecessary money from market, if people are using it as a mean of disposable income, its not serving its purpose) (Incorrect)
C) As the inflation-adjusted return turns negative, investors feel comfortable owning gold as a store of value, even if it yields nothing. (yes, the statement is serving purpose. once the market goes back to normal the investors can invest or purchase gold as a store kept, not to surge money flow in the market) (COREECT)
D) Due to this, inflation played a major role in the investors’ buying decisions. (Gold is not the main focus here as well, investors can purchase variety of things, tangible or non-tangible) (Irrelevant)
E) The rate of return did not fail to prominently surge the investors, who played a major role in buying gold. (as explained in second option buying gold will only lead to more disposable income in the market, hence negating Gold purpose) (Incorrect)
Answer is C
From the passage we can infer the importance of Gold in the economy, it surges high whenever country face the problem of inflation and interest rate falls below the said inflation rate. We have to find an option which justifies the role of gold in an economy.
A) Thus, the interest rates greatly affected the season which led to a rise in great number of investors.(the gold is not a focal point here, nor its specifically mentioned that investors are in for investing in gold, Broad scope)(Irrelevant)
B) Gold proved to be a disposable income for many buyers because they started owning it in great quantities. (if all started purchasing Gold, that means its not surging high in value, the aim behind correcting inflation is to take out unnecessary money from market, if people are using it as a mean of disposable income, its not serving its purpose) (Incorrect)
C) As the inflation-adjusted return turns negative, investors feel comfortable owning gold as a store of value, even if it yields nothing. (yes, the statement is serving purpose. once the market goes back to normal the investors can invest or purchase gold as a store kept, not to surge money flow in the market) (COREECT)
D) Due to this, inflation played a major role in the investors’ buying decisions. (Gold is not the main focus here as well, investors can purchase variety of things, tangible or non-tangible) (Irrelevant)
E) The rate of return did not fail to prominently surge the investors, who played a major role in buying gold. (as explained in second option buying gold will only lead to more disposable income in the market, hence negating Gold purpose) (Incorrect)
Answer is C
richirish
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30 Aug 2020, 20:41
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yashikaaggarwal
Your answer is right but explanation is flawed, gold is a store hold of value as per the investors in an environment that does not yield a return above the risk free rate or even yields negative rates when adjusted for inflation which erodes the value of their assets, hence investors prefer investing in something that will "hold" the value and that happens to be gold, this can be seen in the current times as well as gold prices have risen steeply over the past 6 months.
