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Gmatprep - shares of stock

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Gmatprep - shares of stock [#permalink] New post 04 Feb 2007, 10:35
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Senior Manager
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 [#permalink] New post 04 Feb 2007, 12:15
On Profitable Stock: let P is the real profit he get.
He sold $96 based on sales price of 100% + 20% = 120% (He earn 20% on this sales)
Therefore,
Profit/Sales Price = 20/120 = P/96
P = 96/6 = 16

On Non-Profitable Stock: Let L is the money he lost.
He sold $96 based on sales price of 100% - 20% = 80% (He lost 20% on this sales)
Therefore,
Lost/Sales Price = 20/80 = L/96
L = 96/4 = 24

Total Profit = +16 - 24 = -8

This shows that he loss total of $8.00.

B. is the answer.
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 [#permalink] New post 04 Feb 2007, 20:20
Similar to devil.
96/1.20 = 80 or 16 profit
96/.8 = 120 or 24 loss

8$ loss
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 [#permalink] New post 05 Feb 2007, 15:09
I solved it like this:

We know the Sale price of each stock that is $96

Now Profit = Sale price - Purchase price

From 1st condition we know:

Profit = 20%(Purchase price)
Hence, 20%(Purchase price) = 96 - Purchase price
1.2(Purchase price) = 96
Purchase price = 96/1.2 = 80

Loss = Purchase price - Sale price

From 2nd condition we know:

Loss= 20%(Purchase price)
Hence, 20%(Purchase price) = Purchase price - 96
0.8(Purchase price) = 96
Purchase price = 96/0.8 = 120

Hence his total purchase price for 2 stocks is 120+80 = 200 and he sold both the stocks for 192 Hence there is a loss of $8
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"Live as if you were to die tomorrow. Learn as if you were to live forever." - Mahatma Gandhi

  [#permalink] 05 Feb 2007, 15:09
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