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Economist A: Banks offer only small interest rates for money

Expert replies
by BTGmoderatorDC » Thu Feb 07, 2019 5:25 am

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A

B

C

D

E

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Difficulty

Economist A: Banks offer only small interest rates for money being stored in savings accounts. It is much better to create an investment portfolio with a financial management company in order to take advantage of money that has been put aside.
Economist B: Investments require speculation. I advise that at the moment, storing money in a bank savings account is the wise thing to do.

Which of the following, if true, most weakens economist A's advice?

A) Maintaining a bank savings account requires the payment of handling fees which can be costly, depending on the bank.
B) Investment portfolios are designed to maximize profits while reducing the risk to a minimum by dividing the investments to cover a variety of markets.
C) A recent economic crisis led to the closing of several banks and to the subsequent loss of a great deal of the customers' savings.
D) Owners of savings accounts in banks are only allowed to withdraw their money on certain dates decided upon when the account was created.
E) A financial statistics report shows that 97% of all investment portfolios created in the last 3 years hold losses on their initial investments.

OA E

Source: Economist Gmat
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Source: — Critical Reasoning |