PrepTest 156, Section 1, Question 17
Traditionally, corporate bankruptcy law placed highest priority on(440 more words not shown)
The meaning of the third(22 more words not shown)
Reading the passage
Put a replacement into the actual sentence: under such a system, creditors charge more for credit. The preceding sentences describe Korobkin's broader approach, which increases creditors' risk. Regime refers to that way of organizing bankruptcy, not to a government running the country.
What we’re looking for
Make the substitution before choosing a familiar dictionary meaning. System or framework expresses the idea in this context.
Working the answers
- A
A principle is one rule or guiding idea. Here the reference is to the broader arrangement under which creditors face greater risk.
- B
A constraint is a restriction, rather than the overall arrangement being discussed.
- C
A single law is too narrow. The sentence refers to an approach to bankruptcy and its treatment of the different parties.
- DCorrect
System preserves the meaning: under an arrangement that considers other affected parties as well as creditors, lending becomes riskier and creditors charge more.
- E
Regime can refer to a government elsewhere. Nothing here identifies a government or its leadership; the context is a system for handling bankruptcy.
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