Find all School-related info fast with the new School-Specific MBA Forum

 It is currently 07 Feb 2016, 10:26

### GMAT Club Daily Prep

#### Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized
for You

we will pick new questions that match your level based on your Timer History

Track

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History

# Events & Promotions

###### Events & Promotions in June
Open Detailed Calendar

# Michael's broker sends Michael a margin call if the equity

Author Message
TAGS:
Intern
Joined: 29 Dec 2011
Posts: 38
Followers: 0

Kudos [?]: 32 [0], given: 29

Michael's broker sends Michael a margin call if the equity [#permalink]  25 Oct 2012, 19:18
00:00

Difficulty:

25% (medium)

Question Stats:

84% (01:46) correct 16% (01:04) wrong based on 32 sessions
Michael's broker sends Michael a margin call if the equity balance in his account falls below $25,000 at the close of any trading day during a 30 day time period. Did the broker send Michael a margin call sometime in the last 30 days? (1) Michael's trading account balanced declined by$250,000 during the 30 day period.
(2) At the beginning of the month, Michael's trading account balance was $125,000. And I can't see why answer is E and combining statements 1) and 2) does not yield an answer... Is it because we're saying, just because at the beginning of the month the trading account was at$125,000, it does not mean to say that this was within the 30 day trade period?

[Reveal] Spoiler: OA

Last edited by Bunuel on 26 Oct 2012, 03:32, edited 1 time in total.
Renamed the topic and edited the question.
Director
Status: Done with formalities.. and back..
Joined: 15 Sep 2012
Posts: 647
Location: India
Concentration: Strategy, General Management
Schools: Olin - Wash U - Class of 2015
WE: Information Technology (Computer Software)
Followers: 42

Kudos [?]: 459 [0], given: 23

elegan wrote:
Hello there,

Michael's broker sends Michael a margin call if the equity balance in his account falls below $25,000 at the close of any trading day during a 30 day time period. Did the broker send Michael a margin call sometime in the last 30 days? 1. Michael's trading account balanced declined by$250,000 during the 30 day period.

2. At the beginning of the month, Michael's trading account balance was $125,000. And I can't see why answer is E and combining statements 1) and 2) does not yield an answer... Is it because we're saying, just because at the beginning of the month the trading account was at$125,000, it does not mean to say that this was within the 30 day trade period?

When combining these 2 statements - do not assume that 30 days period is from 1st to 30th of a month.

for example, what if Michael's 30 days period starts on 5th of September and lasts till 4th of October. from statement i we know from 5th september to 4th october balance declined by 250,000. statement ii says, at the beginning of the month (confusion - beginning of september or october? ) balance was $125000. Assuming we are talking about current month October - even then we are not sure, that in 4 days of october whether the balance was lower than 25000 on any given day. Hence both statements together are also insufficient. Therefore Ans E. _________________ Lets Kudos!!! Black Friday Debrief Moderator Joined: 02 Jul 2012 Posts: 1230 Location: India Concentration: Strategy GMAT 1: 740 Q49 V42 GPA: 3.8 WE: Engineering (Energy and Utilities) Followers: 100 Kudos [?]: 1065 [0], given: 116 Re: Trading balance question [#permalink] 25 Oct 2012, 21:51 elegan wrote: Hello there, I'm reading this question: Michael's broker sends Michael a margin call if the equity balance in his account falls below$25,000 at the close of any trading day during a 30 day time period. Did the broker send Michael a margin call sometime in the last 30 days?

1. Michael's trading account balanced declined by $250,000 during the 30 day period. 2. At the beginning of the month, Michael's trading account balance was$125,000.

And I can't see why answer is E and combining statements 1) and 2) does not yield an answer...

Is it because we're saying, just because at the beginning of the month the trading account was at $125,000, it does not mean to say that this was within the 30 day trade period? Advanced thanks! That could also be a reason. But even if both referred to the same period, it would still not be sufficient. At the beginning of the month the balance was$125,000. Maybe on the 2nd day of the month the balance increased by $1,000,000. Then there is a possibility that at no time within the month the balance fell below$25,000.

Kudos Please... If my post helped.
_________________

Did you find this post helpful?... Please let me know through the Kudos button.

Thanks To The Almighty - My GMAT Debrief

GMAT Reading Comprehension: 7 Most Common Passage Types

Current Student
Joined: 06 Sep 2013
Posts: 2036
Concentration: Finance
GMAT 1: 770 Q0 V
Followers: 39

Kudos [?]: 432 [0], given: 355

Re: Michael's broker sends Michael a margin call if the equity [#permalink]  01 Feb 2014, 15:29
elegan wrote:
Michael's broker sends Michael a margin call if the equity balance in his account falls below $25,000 at the close of any trading day during a 30 day time period. Did the broker send Michael a margin call sometime in the last 30 days? (1) Michael's trading account balanced declined by$250,000 during the 30 day period.
(2) At the beginning of the month, Michael's trading account balance was $125,000. And I can't see why answer is E and combining statements 1) and 2) does not yield an answer... Is it because we're saying, just because at the beginning of the month the trading account was at$125,000, it does not mean to say that this was within the 30 day trade period?

But could Michael have deposited any more money into the account? One should also take this into account no? Or what do you guys think

Cheers
J
Re: Michael's broker sends Michael a margin call if the equity   [#permalink] 01 Feb 2014, 15:29
Similar topics Replies Last post
Similar
Topics:
8 John, Michael and Sameer paddled a boat for about 1500 feet. 4 25 Sep 2013, 13:52
3 How many computers did Michael, a salesman for the computer 2 01 Nov 2012, 01:12
Michael arranged all his books in a bookcase with 10 books 1 08 Jul 2011, 10:12
On January, 1, 2002, Michael invested a certain amount of 3 18 Feb 2011, 10:56
22 Michael arranged all his books in a bookcase with 10 books 33 10 Dec 2010, 15:10
Display posts from previous: Sort by