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joyseychow
- Master | Next Rank: 500 Posts
- Posts: 125
- Joined: Mon Dec 15, 2008 9:24 pm
Which of the following best completes the passage below?
The more worried investors are about losing their money, the more they will demand a high potential return on their investment; great risks must be offset by the chance of great rewards. This principle is the fundamental one in determining interest rates, and it is illustrated by the fact that______
(A) successful investors are distinguished by an ability to make very risky investments without worrying about their money
(B) lenders receive higher interest rates on unsecured loans than on loans backed by collateral
(C) in times of high inflation, the interest paid to depositors by banks can actually be below the rate of inflation
(D) at any one time, a commercial bank will have a single rate of interest that it will expect all of its individual borrowers to pay
(E) the potential return on investment in a new company is typically lower than the potential return on investment in a well-established company
The more worried investors are about losing their money, the more they will demand a high potential return on their investment; great risks must be offset by the chance of great rewards. This principle is the fundamental one in determining interest rates, and it is illustrated by the fact that______
(A) successful investors are distinguished by an ability to make very risky investments without worrying about their money
(B) lenders receive higher interest rates on unsecured loans than on loans backed by collateral
(C) in times of high inflation, the interest paid to depositors by banks can actually be below the rate of inflation
(D) at any one time, a commercial bank will have a single rate of interest that it will expect all of its individual borrowers to pay
(E) the potential return on investment in a new company is typically lower than the potential return on investment in a well-established company
