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When the rate of inflation exceeds the rate of return on the

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Director
Joined: 29 Jul 2006
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When the rate of inflation exceeds the rate of return on the [#permalink]

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04 Apr 2007, 04:54
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When the rate of inflation exceeds the rate of return on the most profitable investment available, the difference between those two rates will be the percentage by which, at a minimum, the value of any investment will decline. If in such a circumstance the value of a particular investment declines by more than that percentage. It must be true that______
Which one of the following logically completes the argument?
(A) the rate of inflation has risen
(B) the investment in question is becoming less profitable
(C) the investment in question is less profitable than the most profitable investment available
(D) the rate of return on the most profitable investment available has declined
(E) there has been a change in which particular investment happens to be the most profitable available

Give reasons for ur choices

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VP
Joined: 06 Feb 2007
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04 Apr 2007, 06:06
I choose C because if the difference between the inflation and the rate of return on the given investmetn is more then the most profitable investment's, it has to be less profitable.

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VP
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Schools: Wharton (R2 - submitted); HBS (R2 - submitted); IIMA (admitted for 1 year PGPX)

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04 Apr 2007, 06:23
C too..

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Manager
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04 Apr 2007, 10:20
another C here...

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Manager
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04 Apr 2007, 12:59
What is wrong with (B) ?

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Intern
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04 Apr 2007, 13:47
the last sentence states: "it must be true that ..".

B is not a must. it is a possible scenario, but not a necessary scenario.

on the other hand, C is a superset of B, and also encompasses all other cases that lead to the "particular" investment declining more in value.

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Director
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04 Apr 2007, 20:23
Thanks qxjmba for the explanation...the OA is C

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Manager
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04 Apr 2007, 21:58
vineetgupta wrote:
When the rate of inflation exceeds the rate of return on the most profitable investment available, the difference between those two rates will be the percentage by which, at a minimum, the value of any investment will decline. If in such a circumstance the value of a particular investment declines by more than that percentage. It must be true that______
Which one of the following logically completes the argument?
(A) the rate of inflation has risen
(B) the investment in question is becoming less profitable
(C) the investment in question is less profitable than the most profitable investment available
(D) the rate of return on the most profitable investment available has declined
(E) there has been a change in which particular investment happens to be the most profitable available

Give reasons for ur choices

C

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Re: CR-Profitable investment   [#permalink] 04 Apr 2007, 21:58
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When the rate of inflation exceeds the rate of return on the

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