hard · 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 yield no measurable conservation benefits for the signing countries.
  3. Countries that sign such swaps always go on to honor the conservation pledges they make.
  4. In every debt-for-nature swap, the creditors give up claims that are worth absolutely nothing at all.
  5. Countries that are not already in default on their existing debt never take part in a debt-for-nature swap.

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