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Fairly easy

A rumor that the corporation was close to the ________ caused panic among it's creditors and stockholders.

Correct answer: B. Bankruptcy

  • A. New venture
  • B. Bankruptcy
  • C. Divided declaration
  • D. Annual BOD meeting

Explanation

Bankruptcy is the condition in which a person or corporation cannot pay its debts, so news of possible bankruptcy would alarm creditors and investors. The other options do not indicate financial collapse.

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Meaning from context requires inferring an unfamiliar word or phrase from surrounding clues, including definitions, examples, contrasts, cause and effect, tone and grammatical role. The intended meaning may differ from a dictionary’s first meaning, so collocation, connotation and the sentence’s overall idea must be considered together.

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