Question

Since savings banks have to use short-term deposits to finance long-term fixed-rate mortgage loans, they sometimes lose money when there is a rise in short-term rates and, on the other hand, they are unable to raise the rates on their mortgages.
(A) when there is a rise in short-term rates and, on the other hand, they are unable to raise
(B) when short-term rates rise and they are unable to raise
(C) when a rise in short-term rates occurs and, correspondingly, there is no rise possible in
(D) with a rise in short-term rates, and they are unable to raise
(E) with short-term rates on the rise and no rise possible in

Answer 1

Answer:

The correct answer is B: when short-term rates rise and they are unable to raise

Explanation:

When you look through all the choices, option D and E are first eliminated because they used "with" to start, when in fact the essay makes use of "when", which is correct. We want to have "when" in the sentences, hence we are left with three choices; A, B, and C.

Now, looking at the connectors of A, B, and C, Option A is connected with "on the other hand", Option B is connected with "and", while Option C is connected with "correspondingly".

"On the other hand" makes no sense as a connector because there is no contrast in the statement, and this eliminates option A. Similarly, it is incorrect to use "and" and "correspondingly", as this does not flow, thus eliminating C.

The correct answer is therefore B.