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# 2001, the closing price of stock A and stock B are the same.

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2001, the closing price of stock A and stock B are the same. [#permalink]

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20 Aug 2010, 11:51
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54% (01:40) correct 46% (01:50) wrong based on 169 sessions

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2001, the closing price of stock A and stock B are the same. 2002, the closing price of two stocks both increased and price of A increased more than price of B. By what percent was the price increase of stock A greater than the price increase of stock B?

(1) 2002, the closing price of stock A is 8% greater than the closing price of stock B.
(2) The closing price of stock A is increased by 15% from 2001 to 2002.

For me the ste 1 is OK unless I did not get the question

Many thanks
[Reveal] Spoiler: OA

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20 Aug 2010, 12:40
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mehdiov wrote:
2001, the closing price of stock A and stock B are the same. 2002, the closing price of two stocks both increased and price of A increased more than price of B. By what percent was the price increase of stock A greater than the price increase of stock B?

(1) 2002, the closing price of stock A is 8% greater than the closing price of stock B.
(2) The closing price of stock A is increased by 15% from 2001 to 2002.

For me the ste 1 is OK unless I did not get the question

Many thanks

Let the initial price of stocks A and B be $$x$$;
Le the increase of stock A be $$a$$, so after increase price of A is $$x+a$$;
Le the increase of stock B be $$b$$, so after increase price of B is $$x+b$$;

Question: "By what percent was the price increase of stock A greater than the price increase of stock B" --> $$\frac{a-b}{b}=?$$

(1) 2002, the closing price of stock A is 8% greater than the closing price of stock B --> $$x+a=1.08(x+b)$$ --> $$x=\frac{100a-108b}{8}$$. Don't have the relationship between $$a$$ and $$b$$, hence can not calculate the value of $$\frac{a-b}{b}$$. Not sufficient.

To illustrate this:
If initial price was 100$and after increase price of B became 200$ (increase of B 100$), then price of A, after increase would be 216$, which is 8% more (increase of A 116$). In this case price increase of stock A would be $$\frac{116-100}{100}=0.16$$ times more (16% more); If initial price was 100$ and after increase price of B became 300$(increase of B 200$), then price of A, after increase would be 3246$, which is 8% more (increase of A 224$). In this case price increase of stock A would be $$\frac{224-200}{100}=0.24$$ times more (24% more).

(2) The closing price of stock A is increased by 15% from 2001 to 2002 --> $$x+a=1.15x$$ --> $$x=\frac{20a}{3}$$. Clearly not sufficient, as no info about the increase of stock B.

(1)+(2) $$x=\frac{100a-108b}{8}$$ and $$x=\frac{20a}{3}$$ --> $$\frac{100a-108b}{8}=\frac{20a}{3}$$ --> $$35a=81b$$, we have relationship between $$a$$ and $$b$$, hence we can find the ratio of $$\frac{a-b}{b}$$. Sufficient.

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20 Aug 2010, 12:45
Hi,

Stmt 1:

Let the closing stock price of both A and B (in 2001) be Rs 100.

Case 1:

Let the closing stock price of B at the end of 2002 be Rs 200. Then, A is Rs 216.

Price increase of stock A = Rs 116
Price increase of stock B = Rs 100

% by which price increase in stock A is greater than that in stock B =
((116 - 100) / 100) * 100 = 16%

Case 2:

Let the closing stock price of B at the end of 2002 be Rs 300. Then, A is Rs 324.

Price increase of stock A = Rs 224
Price increase of stock B = Rs 200

% by which price increase in stock A is greater than that in stock B =
((224 - 200) / 200) * 100 = 12%

Hence, statement 1 is not sufficient. Hope this clarifies.

I guess the reason why stmt 2 is not sufficient is fairly straightforward.

Thanks.
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Naveenan Ramachandran
4GMAT - Mumbai

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Re: 2001, the closing price of stock A and stock B are the same. [#permalink]

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17 Aug 2014, 09:14
Hello from the GMAT Club BumpBot!

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Re: 2001, the closing price of stock A and stock B are the same. [#permalink]

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17 Aug 2014, 15:27
4gmatmumbai wrote:
Hi,

Stmt 1:

Let the closing stock price of both A and B (in 2001) be Rs 100.

Case 1:

Let the closing stock price of B at the end of 2002 be Rs 200. Then, A is Rs 216.

Price increase of stock A = Rs 116
Price increase of stock B = Rs 100

% by which price increase in stock A is greater than that in stock B =
((116 - 100) / 100) * 100 = 16%

Case 2:

Let the closing stock price of B at the end of 2002 be Rs 300. Then, A is Rs 324.

Price increase of stock A = Rs 224
Price increase of stock B = Rs 200

% by which price increase in stock A is greater than that in stock B =
((224 - 200) / 200) * 100 = 12%

Hence, statement 1 is not sufficient. Hope this clarifies.

I guess the reason why stmt 2 is not sufficient is fairly straightforward.

Thanks.

I think the try and error will consume a lot of time. I prefer the solution of Brunel
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Re: 2001, the closing price of stock A and stock B are the same. [#permalink]

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21 May 2016, 04:07
Hello from the GMAT Club BumpBot!

Thanks to another GMAT Club member, I have just discovered this valuable topic, yet it had no discussion for over a year. I am now bumping it up - doing my job. I think you may find it valuable (esp those replies with Kudos).

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Re: 2001, the closing price of stock A and stock B are the same.   [#permalink] 21 May 2016, 04:07
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