PrepTest 131, Section 3, Question 1
New technologies that promise to extend life and(48 more words not shown)
Which one of the following,(24 more words not shown)
- AWhen investments in(32 more words not shown)
- BA large variety(18 more words not shown)
- CThe development of(34 more words not shown)
- DSome investments that(14 more words not shown)
- EThe scientific research(23 more words not shown)
Reading the argument
Developing a way to live to 150 without pain would take research. But does needing research make an investment risky? Not by itself. If the research were guaranteed to succeed, the need to do it wouldn't create the same concern.
Requiring a lot of money isn't enough either. The crucial information comes next: these innovations are unlikely to provide any financial return. Now the risk makes sense. Investors commit substantial money and may get nothing back.
Why would anyone invest anyway? Think about the size of the possible reward. Imagine a project with only a one-in-a-hundred chance of success, but a successful result worth a billion dollars. Or imagine paying a thousand dollars for a slot-machine pull with an enormous possible prize. The losses could be frequent while the rare payoff remained attractive.
What we’re looking for
Those are illustrations, not the actual odds or returns here. They suggest what could resolve the puzzle: when one of these technologies succeeds financially, the return is unusually large. We don't need to make the investment safe to explain why some people are willing to take the risk.
Working the answers
- ACorrect
Successful investments generally return many times the original amount and far more than safer investments do. That supplies the attraction we were looking for. It doesn't promise the billion-dollar reward in the illustration or guarantee that every investor will profit. It gives some investors a reason to accept a low chance of success: a success can be especially valuable.
- B
A variety of technologies being developed doesn't tell us what investors earned from them. Successful development and a financial return aren't automatically the same thing. B describes what has been produced without explaining why committing money to these risky projects is appealing.
- C
Other technologies might be risky too. Projects involving self-driving cars or travel to Mars, for example, could have their own uncertainties. But risk elsewhere doesn't supply a reason to invest in the particular technologies discussed here. We need to explain their appeal despite their risk.
- D
Some investments fail despite initially looking promising. That gives us another way an investor could lose money, not a reason to choose investments already known to be unlikely to return anything. The possibility of disappointment elsewhere does not explain the attraction here.
- E
A failure to improve our understanding of nature doesn't explain a willingness to invest. It supplies no financial benefit or other motive for undertaking these projects. The question is why some people accept the risk, not whether every research project produces new scientific understanding.
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