Self-study
When the rate of inflation exceeds the rate of return on the most profitable investment available, the difference between those two rates will be the percentage by which, at a minimum, the value of any investment will decline. ██ ██ ████ █ ████████████ ███ █████ ██ █ ██████████ ██████████ ████████ ██ ████ ████ ████ ███████████ ██ ████ ██ ████ ████ ████████
Argument Structure
The stimulus starts by explaining that, in situations where the rate of inflation is higher than the rate of return on the most profitable investment available, the difference between those rates provides a sort of "benchmark," the minimum percentage by which all investments' value will decline.
The stimulus then asks us to conclude what must be true about an investment that, in this situation, declines by more than that "benchmark" percentage.
Notable Inferences
For a stimulus as abstract as this one, it might help to plug in some concrete examples. Let's say the rate of inflation is 15%, and the most profitable investment, stock A, is providing a return of 12%. The difference between those rates is 3%. So stock A, as the most profitable investment available, is losing value at a rate of 3%, and all other stocks — which must be equally or less profitable than stock A — must be losing value at least at the same rate.
So if we learn that some investment B is losing value at a rate of 5%, it might make sense to infer that the difference between B's rate of return and the inflation rate is 5%: i.e., B has a 10% rate of return. It wouldn't make sense to draw a conclusion about a change in either the inflation rate or in the rate of return on A, because those form the benchmark percentage we are comparing to when we observe B is losing value by more than that percentage.
24.
Which one of the following █████████ █████████ ███ █████████
a
the rate of █████████ ███ █████
This doesn't make sense to complete the argument. The sentence compares the percentage by which a certain investment is declining to the "benchmark" percentage, which has already been defined as the difference between the inflation rate and the rate of return on the most profitable investment. If the inflation rate had changed, we would have to talk about a change in the benchmark itself, not the difference between the benchmark percentage and the change in value of some other investment.
b
the investment in ████████ ██ ████████ ████ ██████████
This might be a tempting answer choice, because it's technically true: this investment must be becoming less profitable, because all investments are losing value in this scenario. But because we know this already, this doesn't actually make sense as a completion of this sentence.
We already know all investments are losing value, at least at the rate the most profitable investment is losing value. We want to know something more specific: what does the fact that this investment is losing value at a higher percentage than the benchmark tell us about the investment? This answer choice is too general to provide a logical answer.
c
the investment in ████████ ██ ████ ██████████ ████ ███ ████ ██████████ ██████████ █████████
This is correct. If the benchmark percentage is defined as the difference between the inflation rate and the rate of return on the most profitable investment, and this investment is losing value at a higher percentage than the benchmark, then — whatever else is true about this investment — it cannot be as profitable as the most profitable investment. Otherwise, it would set the benchmark, and we would have to talk about a change in the benchmark itself, instead of comparing this investment's rate of loss to the benchmark.
d
the rate of ██████ ██ ███ ████ ██████████ ██████████ █████████ ███ ████████
If the rate of return on the most profitable investment available has declined, then the "benchmark" percentage from the first sentence would change. But in the second sentence, we are comparing a particular investment's rate of value loss to that benchmark percentage, not discussing a change in the benchmark itself. So this doesn't make sense to complete the sentence.
e
there has been █ ██████ ██ █████ ██████████ ██████████ ███████ ██ ██ ███ ████ ██████████ █████████
This doesn't follow logically. If the most profitable investment available has changed, but has the same rate of return as the previous one, then the benchmark will not change; if it has a different rate of return, then the benchmark percentage will change, and we would be talking about a change in the benchmark, not comparing a particular investment's value to the benchmark. So this doesn't work to complete the sentence.