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GMAT Verbal Reasoning Practice Test 1

Question : 82 of 100

Marks: +1, -0

Before the law requiring the contractor to get bank backing to insure all individual investments was passed, there was a lower rate of bankruptcy than there is now.
When the law did not insure buyers against the bankruptcies of building contractors, frequent bankruptcies occurred as result of depositors' fears of investing money in a newly built house.
Surveys show that a significant proportion of new home buyers are aware that their investments are protected by law.
There is an upper limit on the amount of an individual's investment for which a contractor is required by law to get bank backing, but very few individuals' investments exceed this limit.
The security of a contractor against bankruptcy depends on the percentage of its assets reinvested into the business.

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