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An investor bought 200 shares of stock in ABCD company in 1990. By 199

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An investor bought 200 shares of stock in ABCD company in 1990. By 199  [#permalink]

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New post 28 Aug 2016, 10:39
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An investor bought 200 shares of stock in ABCD company in 1990. By 1992, the investment was worth only 2/3 of its original value. By 1995, the 200 shares were worth only 1/2 of their value in 1990. By what percent did the value of the investment drop from 1992 to 1995?

A. 16 2/3%
B. 25%
C. 33 1/3%
D. 50%
E. 66 2/3%

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Re: An investor bought 200 shares of stock in ABCD company in 1990. By 199  [#permalink]

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New post 28 Aug 2016, 11:17
Bunuel wrote:
An investor bought 200 shares of stock in ABCD company in 1990. By 1992, the investment was worth only 2/3 of its original value. By 1995, the 200 shares were worth only 1/2 of their value in 1990. By what percent did the value of the investment drop from 1992 to 1995?

A. 16 2/3%
B. 25%
C. 33 1/3%
D. 50%
E. 66 2/3%


Answer B.

Let price of each share in 1990 = X.

Total cost in 1990 = 200X

Now Price in 1992 = 2/3 * 200X = 400/3 * X

Now price in 1995 = 1/2 *200X= 100X

%Change in 1995 from 1992 = [(400/3* X -100X) / (400/3 *X) ] *100 = 25%
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Re: An investor bought 200 shares of stock in ABCD company in 1990. By 199  [#permalink]

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New post 28 Aug 2016, 17:51
Since the fractions are 2/3 and 1/2, let's pick a "good" multiple of 6 as the value of the original investment.
200 shares were bought. Let's assume the price of each as 3 -> total value of original investment = 600.

1992: the investment was worth only 2/3 of its original value.
Value in 1992 = 2/3 * 600 = 400.

1995: the 200 shares were worth only 1/2 of their value in 1990.
Value in 1995 = 1/2 * 600 = 300.

Value in 1992 - Value in 1995 = 400 - 300 = 100, which is 25% of the value in 1992.
Hence, the value from 1992 to 1995 dropped by 25%.

Answer (B).
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Re: An investor bought 200 shares of stock in ABCD company in 1990. By 199  [#permalink]

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New post 14 Oct 2017, 08:43
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Re: An investor bought 200 shares of stock in ABCD company in 1990. By 199 &nbs [#permalink] 14 Oct 2017, 08:43
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