medium · GMAT Verbal

In a debt-for-nature swap, a creditor forgives part of a country's debt in exchange for the country's pledge to fund conservation. One report notes that every country that has signed such a swap was, at signing, already in default on the forgiven debt and had no realistic prospect of repaying it.

Which of the following can be most properly inferred from the report's findings?

  1. For these swaps, the creditors gave up claims that were unlikely to be paid even without the swap.
  2. Debt-for-nature swaps produce no conservation benefits.
  3. Countries that sign such swaps always honor their conservation pledges.
  4. Creditors lose nothing of real value in any debt-for-nature swap.
  5. Countries not in default never participate in debt-for-nature swaps.

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