medium · GMAT Verbal
Petrovia funnels oil revenue into a sovereign wealth fund and spends only the fund's investment returns, never the underlying capital. In every year since the fund launched, oil prices fell yet public spending held steady. Critics note that Petrovia has also passed no fiscal reform since the fund began.
Which of the following must be true based on the statements above?
- The sovereign wealth fund has fully insulated Petrovia from any future oil-price shock.
- In at least one year since the fund launched, the fund's investment returns were enough to keep public spending steady despite falling oil prices.
- Petrovia would have collapsed financially without the sovereign wealth fund.
- Fiscal reform would have lowered public spending more than the fund did.
- Oil prices will continue to fall in the coming years.
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