Exam GMAT Section 3 Verbal Ability topic 2 question 551 discussion

Actual exam question from Test Prep's GMAT Section 3 Verbal Ability

Question #: 551
Topic #: 2

[All GMAT Section 3 Verbal Ability Questions]

Consumers in California seeking personal loans have fewer banks to turn to than do consumers elsewhere in the United States. This shortage of competition among banks explains why interest rates on personal loans in California are higher than in any other region of the United States.
Which of the following, if true, most substantially weakens the conclusion above?

A. Because of the comparatively high wages they must pay to attract qualified workers, California banks charge depositors more than banks elsewhere do for many of the services they offer.
B. Personal loans are riskier than other types of loans, such as home mortgage loans, that banks make.
C. Since bank deposits in California are covered by the same type of insurance that guarantees bank deposits in other parts of the United States, they are no less secure than deposits elsewhere.
D. The proportion of consumers who default on their personal loans is lower in California than in any other region of the United States.
E. Interest rates paid by California banks to depositors are lower than those paid by banks in other parts of the United States because in California there is less

Show Suggested Answer

Suggested Answer: A 🗳️

by [deleted] at March 10, 2025, 2:54 a.m.

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Exam GMAT Section 3 Verbal Ability topic 2 question 551 discussion

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