Every time a business grants financial credit to an

Question

Every time a business grants financial credit to an individual, the business assumes risk. In order to evaluate the risk, a business must have correct information about that individualâ€™s financial history. It is true that credit bureaus, which compile such information from computerized records, have been accused of invading the consumerâ€™s right to privacy. If, however, only limited restrictions are placed on the availability of such information to businesses, those businesses will be able to reduce their overall exposure to risk by giving credit only to people with good credit ratings while at the same time extending larger amounts of credit to more people. This way credit bureaus can, in fact, prevent the foolhardy consumer from becoming seriously overextended.

The author argues that any harm individual consumers suffer from the relatively free access of the business community to the information compiled by credit bureaus is

a. compensated by the benefits that free access provides to consumers in general

b. attributable to the reluctance of many businesses to increase their exposure to risk

c. unavoidable, because consumers must sacrifice some of their rights in exchange for credit

d. sufficient to justify the business communityâ€™s careful scrutiny of the data supplied by credit bureaus

e. negligible, in view of the business communityâ€™s need for accurate financial histories

MA · Answer

go with B. though its really cumbersome.

Gauss · Answer

a. compensated by the benefits that free access provides to consumers in general

 clear winner is A  is compensated the eventual lost of privacy with higher chances to get credit

arunsanand · Answer

The  Answer is â€˜Aâ€™ , what the author argues is that free access will help businesses grant higher credit to those who can afford it and more credit in general, thus benefiting the consumers overall. So the relatively free access to credit info is offset by this.

haas_mba07 · Answer

a. compensated by the benefits that free access provides to consumers in general 

Implies that people with bad credit will be disallowed loans they should not take out; business will benefit the remaining consumers by providing them larger loans.

u2lover · Answer

so harm is compensated by the fact that people with bad credit history get the loans, because the argument mentions restrictions, which cause the smaller number of loans with higher credit lines

A

I think B is actually going against the argument... because businesses are not reluctant to give out the credit to the people with bad credit

ps_dahiya · Answer

Going with A.

Praetorian · Answer

Great work. The answer is A.

The legend akamaibrah's explanation:

The author is careful to point out both benefits and harms of sharing information, but the jist of his statement is that is that by imposing some restrictions upon the information (implying that the harm will be also limited), the benefits outweight the harm.

B may be true but it is not the point of the author's argument. In addition, that harm is a secondary effect.

C is too strong. It says that "any" harm is unavoidable where the author implies that by imposing some restrictions on the use of personal information, that the harm will be mitigated to the point where the benefits outweigh the harm.

D is also too strong. The author concedes that there is potential for abuse.

E is also too strong. The author never states nor implies that any harm is "negligible".

jaynayak · Answer

Will go with A.

The author's tone and his arguments are more inclined to prove that free access of information actually benefits the consumer. Specifically the last line nails down the answer.

  This way credit bureaus can, in fact, prevent the foolhardy consumer from becoming seriously overextended.

xsports · Answer

A ..

Every time a business grants financial credit to an

Prep Toolkit

Top 5 GMAT Debrief Videos

615 to 715 in 15 Days (Ria's Strategies)

More than Quant/Verbal Abilities: Speed vs. Accuracy

745 with Only Self-Prep and GMAT Club

From 555 to 765: 210-point Improvement

Perfect 805 Score Debrief by Julia

My Rewards