Check GMAT Club Decision Tracker for the Latest School Decision Releases https://gmatclub.com/AppTrack

 It is currently 24 May 2017, 14:04

### 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

# Which of the following best completes the passage below? As

Author Message
TAGS:

### Hide Tags

Manager
Joined: 11 Jul 2009
Posts: 53
Followers: 1

Kudos [?]: 27 [0], given: 19

Which of the following best completes the passage below? As [#permalink]

### Show Tags

03 Nov 2009, 03:28
2
This post was
BOOKMARKED
00:00

Difficulty:

(N/A)

Question Stats:

82% (02:26) correct 18% (01:55) wrong based on 82 sessions

### HideShow timer Statistics

Which of the following best completes the passage below?
As long as savings deposits are insured by the government, depositors will have no incentive to evaluate the financial strength of a savings bank. Yield alone will influence their choice of bank. To attract deposits, banks will be forced to offer the highest possible interest rates. And since paying higher rates inevitably strains the financial strength of a bank, ______
(A) the government will be forced o impose limitations on interest rates
(B) deposit insurance will ultimately lead to the financial weakening of many banks
(C) savers will be forced to choose between deposit insurance and higher interest rates
(D) deposits will tend to go to the banks with the greatest financial strength
(E) bank profits will tend to rise to ever-higher levels

Any explainations for the chosen answers are welcome.
If you have any questions
New!
Manager
Joined: 28 Jul 2009
Posts: 153
Followers: 3

Kudos [?]: 197 [0], given: 4

Re: As long as savings deposits are insured [#permalink]

### Show Tags

03 Nov 2009, 04:48
raven678 wrote:
Which of the following best completes the passage below?
As long as savings deposits are insured by the government, depositors will have no incentive to evaluate the financial strength of a savings bank. Yield alone will influence their choice of bank. To attract deposits, banks will be forced to offer the highest possible interest rates. And since paying higher rates inevitably strains the financial strength of a bank, ______
(A) the government will be forced o impose limitations on interest rates
(B) deposit insurance will ultimately lead to the financial weakening of many banks
(C) savers will be forced to choose between deposit insurance and higher interest rates
(D) deposits will tend to go to the banks with the greatest financial strength
(E) bank profits will tend to rise to ever-higher levels

Any explainations for the chosen answers are welcome.

I vote for D.
A, B, C, E are simply iirellevant here.
D clearly completes passage. Since paying higher rates will attract savers (depositors), and since higher rates strain financial strength, then savers will go to the banks with greatest strength, what D illustrates.
Intern
Joined: 02 May 2009
Posts: 22
Followers: 0

Kudos [?]: 0 [0], given: 2

Re: As long as savings deposits are insured [#permalink]

### Show Tags

04 Nov 2009, 07:38
i would go for D, pls post OA
Intern
Joined: 02 May 2009
Posts: 22
Followers: 0

Kudos [?]: 0 [0], given: 2

Re: As long as savings deposits are insured [#permalink]

### Show Tags

04 Nov 2009, 07:42
i would go for D, pls post OA
Manager
Joined: 22 Jun 2009
Posts: 62
Schools: Wharton, Kellogg, Duke (Health care management)
Followers: 3

Kudos [?]: 26 [1] , given: 3

Re: As long as savings deposits are insured [#permalink]

### Show Tags

04 Nov 2009, 10:43
1
KUDOS
raven678 wrote:
Which of the following best completes the passage below?
As long as savings deposits are insured by the government, depositors will have no incentive to evaluate the financial strength of a savings bank. Yield alone will influence their choice of bank. To attract deposits, banks will be forced to offer the highest possible interest rates. And since paying higher rates inevitably strains the financial strength of a bank, ______
(A) the government will be forced o impose limitations on interest rates
(B) deposit insurance will ultimately lead to the financial weakening of many banks
(C) savers will be forced to choose between deposit insurance and higher interest rates
(D) deposits will tend to go to the banks with the greatest financial strength
(E) bank profits will tend to rise to ever-higher levels

Any explainations for the chosen answers are welcome.

B
since paying higher rates inevitably strains the financial strength of a bank and to attract deposits, and deposit insurance will force banks to offer the highest possible interest rates, deposit insurance will ultimately lead to the financial weakening of many banks.

Last edited by speeddeamon on 04 Nov 2009, 19:55, edited 1 time in total.
Manager
Joined: 11 Jul 2009
Posts: 53
Followers: 1

Kudos [?]: 27 [0], given: 19

Re: As long as savings deposits are insured [#permalink]

### Show Tags

04 Nov 2009, 14:31
speeddeamon wrote:
raven678 wrote:
Which of the following best completes the passage below?
As long as savings deposits are insured by the government, depositors will have no incentive to evaluate the financial strength of a savings bank. Yield alone will influence their choice of bank. To attract deposits, banks will be forced to offer the highest possible interest rates. And since paying higher rates inevitably strains the financial strength of a bank, ______
(A) the government will be forced o impose limitations on interest rates
(B) deposit insurance will ultimately lead to the financial weakening of many banks
(C) savers will be forced to choose between deposit insurance and higher interest rates
(D) deposits will tend to go to the banks with the greatest financial strength
(E) bank profits will tend to rise to ever-higher levels

Any explainations for the chosen answers are welcome.

B
since paying higher rates inevitably strains the financial strength of a bank and to attract deposits, deposit insurance will force banks to offer the highest possible interest rates, deposit insurance will ultimately lead to the financial weakening of many banks.

OA is B as well.
SVP
Affiliations: HEC
Joined: 28 Sep 2009
Posts: 1636
Concentration: Economics, Finance
GMAT 1: 730 Q48 V44
Followers: 101

Kudos [?]: 647 [0], given: 432

Re: As long as savings deposits are insured [#permalink]

### Show Tags

13 Nov 2009, 09:54
Choice B seems like the right fit. Government sponsored deposit insurance limits competition to interest rates on deposits, and this creates a situation that undermines the strength of banks.
_________________
GMAT Club Legend
Joined: 01 Oct 2013
Posts: 10371
Followers: 997

Kudos [?]: 224 [0], given: 0

Re: Which of the following best completes the passage below? As [#permalink]

### Show Tags

11 Feb 2015, 14:47
Hello from the GMAT Club VerbalBot!

Thanks to another GMAT Club member, I have just discovered this valuable topic, yet it had no discussion for over a year. I am now bumping it up - doing my job. I think you may find it valuable (esp those replies with Kudos).

Want to see all other topics I dig out? Follow me (click follow button on profile). You will receive a summary of all topics I bump in your profile area as well as via email.
GMAT Club Legend
Joined: 01 Oct 2013
Posts: 10371
Followers: 997

Kudos [?]: 224 [0], given: 0

Re: Which of the following best completes the passage below? As [#permalink]

### Show Tags

17 Jul 2016, 08:56
Hello from the GMAT Club VerbalBot!

Thanks to another GMAT Club member, I have just discovered this valuable topic, yet it had no discussion for over a year. I am now bumping it up - doing my job. I think you may find it valuable (esp those replies with Kudos).

Want to see all other topics I dig out? Follow me (click follow button on profile). You will receive a summary of all topics I bump in your profile area as well as via email.
Re: Which of the following best completes the passage below? As   [#permalink] 17 Jul 2016, 08:56
Similar topics Replies Last post
Similar
Topics:
Which of the following best completes the passage below? The 8 02 Jun 2013, 23:17
1 Which of the following best completes the passage below? At 2 17 Feb 2016, 13:11
1 Which of the following best completes the passage below? 16 20 Jul 2016, 11:52
Which of me following best completes the passage below? 9 30 Nov 2013, 04:09
1 Which of the following best completes the passage below? One 17 02 Jun 2015, 10:11
Display posts from previous: Sort by