GMAT Critical Reasoning
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Source: OG
Level: 3
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