大全-D-16 看了讨论但是不明白

v521

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 to 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（B）

(E) bank profits will tend to rise to ever-higher levels

为什么不选A？？？谢谢！！！！

[此贴子已经被作者于2006-1-28 16:50:50编辑过]

sophia417

大全-D-16. 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

Reasoning: saving deposits insured by the government => depositors have no incentive to evaluate the financial strength of a bank => they don’t have to make a choice among banks since every bank is OK for them

In order to attract more deposits, banks have to offer highest possible interest rates.

But paying higher rates strains the financial strength of a bank, therefore banks cannot attract more deposits as they wishes. it is clearly that this is a vicious circle for banks which want to attract more deposits. And the origin of the problem of course is the current deposit insurance by the government.

sophia417

大全-D-16. 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

Reasoning: saving deposits insured by the government => depositors have no incentive to evaluate the financial strength of a bank => they don’t have to make a choice among banks since every bank is OK for them

In order to attract more deposits, banks have to offer highest possible interest rates.

But paying higher rates strains the financial strength of a bank, therefore banks cannot attract more deposits as they wishes. it is clearly that this is a vicious circle for banks which want to attract more deposits. And the origin of the problem of course is the current deposit insurance by the government.