Last visit was: 18 Nov 2025, 20:38 It is currently 18 Nov 2025, 20:38
Home
GMAT
Messages
Tests
Schools
Events
Rewards
Chat
My Profile
Close
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
Your Progress

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
Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.
Go to My Error Log Learn more
Close
Request Expert Reply
Confirm Cancel
Back to Forum
Create Topic
User avatar
BrainLab
User avatar
Current Student
Joined: 10 Mar 2013
Last visit: 26 Jan 2025
Posts: 346
Own Kudos:
3,129
 [46]
Given Kudos: 200
Location: Germany
Concentration: Finance, Entrepreneurship
Schools: WHU MBA"20 (A$)
GMAT 1: 580 Q46 V24
GPA: 3.7
WE:Marketing (Telecommunications)
Schools: WHU MBA"20 (A$)
GMAT 1: 580 Q46 V24
Posts: 346
Kudos: 3,129
 [46]
An investor purchased 20 shares of a certain stock at a price of $45.7 17 Jan 2016, 04:19
5
Kudos
Add Kudos
41
Bookmarks
Bookmark this Post
00:00
Start Timer
Pause Timer
Resume Timer
Show Answer
Hide
Show
History
D
Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!

Difficulty:

15% (low)

Question Stats:

85% (02:00) correct 15% (02:07) wrong based on 1353 sessions

History

Date
Time
Result
Not Attempted Yet
An investor purchased 20 shares of a certain stock at a price of $45.75 per share. Later this investor purchased 30 more shares at a price of $46.25 per share. What was the average (arithmetic mean) price per share that this investor paid for the 50 shares?

A. $45.80
B. $45.95
C. $46.00
D. $46.05
E. $46.20
ShowHide Answer
Official Answer
D
Most Helpful Reply
User avatar
EMPOWERgmatRichC
User avatar
Major Poster
Joined: 19 Dec 2014
Last visit: 31 Dec 2023
Posts: 21,785
Own Kudos:
12,804
 [39]
Given Kudos: 450
Status:GMAT Assassin/Co-Founder
Affiliations: EMPOWERgmat
Location: United States (CA)
GMAT 1: 800 Q51 V49
GRE 1: Q170 V170
Expert
Expert reply
GMAT 1: 800 Q51 V49
GRE 1: Q170 V170
Posts: 21,785
Kudos: 12,804
 [39]
An investor purchased 20 shares of a certain stock at a price of $45.7 18 Jan 2016, 12:11
24
Kudos
Add Kudos
14
Bookmarks
Bookmark this Post
Hi BrainLab,

Yes, you CAN correctly answer this question without doing any long-winded calculations, but you do have to note the particular details in the prompt AND use the answer choices to your advantage.

While the answers appear 'close together', they're really not (relative to what the question is asking.

IF we had an equal number of both types of shares (meaning for every 1 share at $45.75, we'd have 1 share at $46.25), then the average price per share would be $46 exactly. You don't actually have to perform a big calculation to prove that either. Since the first share is 25 cents LESS than $46 and the second share is 25 cents MORE than $46, those differences 'cancel out', leaving us with an average of $46.

The prompt tells us that there are MORE of the $46.25 shares, so the average is clearly going to be greater than $46. That narrows the options down to Answers D and E. However, there are only 20 of the first shares and 30 of the second shares, and Answer E is SO CLOSE to $46.25, that there's no way for that to be the average. There would need to be far more of the second shares (proportionately speaking) to drive the average up to $46.20. Since that's not the case, the answer MUST be Answer D.

GMAT assassins aren't born, they're made,
Rich
User avatar
chetan2u
User avatar
GMAT Expert
Joined: 02 Aug 2009
Last visit: 15 Nov 2025
Posts: 11,238
Own Kudos:
43,696
 [20]
Given Kudos: 335
Status:Math and DI Expert
Location: India
Concentration: Human Resources, General Management
GMAT Focus 1: 735 Q90 V89 DI81
Products:
My Reviews
Expert
Expert reply
GMAT Focus 1: 735 Q90 V89 DI81
Posts: 11,238
Kudos: 43,696
 [20]
An investor purchased 20 shares of a certain stock at a price of $45.7 17 Jan 2016, 04:40
10
Kudos
Add Kudos
10
Bookmarks
Bookmark this Post
BrainLab
BrainLab
An investor purchased 20 shares of certain stock at price of $45.75 per share. Later this investor purchased 30 more shares at price of $46.25 per share. What was the average price per share that this investor paid for the 50 shares?

1. 45.80
2. 45.95
3. 46.00
4. 46.05
5. 46.20

Is there some way to avoid intensive calculations ? I've solved it this way.... (at the time I was writing my solution, I saw a much better one :))

\(\frac{45,75*20+30(45,75+0,50)}{50}\) --> \(\frac{50*45,75}{50} + \frac{15}{50}= 45,75+0,3=46,05\)
Answer D
Show more

Hi
you dont require to do any intensive calculations if you do by weighted average..
the ratio of shares =2:3 and their price = 45.75:46.25..
the average ratio of total would depend on the ratio of number of shares..
difference in the price = 46.25-45.75=.50..
divide this .50 in the ratio 2:3=.2:.3...
since the number of shares of 46.25 is more, the average will be closer to it...
so average= 46.25- .2=46.05... .2 has come from .2:.3...
D
hope it helps you in reducing your calculations further
General Discussion
User avatar
BrainLab
User avatar
Current Student
Joined: 10 Mar 2013
Last visit: 26 Jan 2025
Posts: 346
Own Kudos:
3,129
 [13]
Given Kudos: 200
Location: Germany
Concentration: Finance, Entrepreneurship
Schools: WHU MBA"20 (A$)
GMAT 1: 580 Q46 V24
GPA: 3.7
WE:Marketing (Telecommunications)
Schools: WHU MBA"20 (A$)
GMAT 1: 580 Q46 V24
Posts: 346
Kudos: 3,129
 [13]
An investor purchased 20 shares of a certain stock at a price of $45.7 17 Jan 2016, 04:32
9
Kudos
Add Kudos
4
Bookmarks
Bookmark this Post
BrainLab
An investor purchased 20 shares of certain stock at price of $45.75 per share. Later this investor purchased 30 more shares at price of $46.25 per share. What was the average price per share that this investor paid for the 50 shares?

1. 45.80
2. 45.95
3. 46.00
4. 46.05
5. 46.20
Show more

Is there some way to avoid intensive calculations ? I've solved it this way.... (at the time I was writing my solution, I saw a much better one :))

\(\frac{45,75*20+30(45,75+0,50)}{50}\) --> \(\frac{50*45,75}{50} + \frac{15}{50}= 45,75+0,3=46,05\)
Answer D
avatar
banarsumboro07
avatar
Joined: 06 Apr 2018
Last visit: 24 Jun 2019
Posts: 1
Own Kudos:
7
 [7]
Posts: 1
Kudos: 7
 [7]
An investor purchased 20 shares of a certain stock at a price of $45.7 07 Apr 2018, 08:47
5
Kudos
Add Kudos
1
Bookmarks
Bookmark this Post
\(45.75+\frac{30}{50}*(46.25-45.75)=46.05\)
User avatar
KarishmaB
User avatar
Joined: 16 Oct 2010
Last visit: 18 Nov 2025
Posts: 16,265
Own Kudos:
76,983
 [10]
Given Kudos: 482
Location: Pune, India
Expert
Expert reply
Active GMAT Club Expert! Tag them with @ followed by their username for a faster response.
Posts: 16,265
Kudos: 76,983
 [10]
An investor purchased 20 shares of a certain stock at a price of $45.7 24 May 2018, 02:29
8
Kudos
Add Kudos
2
Bookmarks
Bookmark this Post
BrainLab
An investor purchased 20 shares of certain stock at price of $45.75 per share. Later this investor purchased 30 more shares at price of $46.25 per share. What was the average price per share that this investor paid for the 50 shares?

1. 45.80
2. 45.95
3. 46.00
4. 46.05
5. 46.20
Show more

Responding to a pm:

The distance between 45.75 and 46.25 is of $0.5. Weights are in the ratio 2:3 so the distance will split in the ratio 3:2 i.e. average will be $46.05.

This is based on the concept that weighted average splits the distance between C1 and C2 is the ratio which is inverse of the ratio of W1 and W2. This is the same concept on which out formulas based:

W1/W2 = (C2 - Cavg) / (Cavg - C1)

I prefer to not use the formula here but just the concept because the formula will involve some calculations.
User avatar
AyushCrackVerbal
User avatar
CrackVerbal Representative
Joined: 13 May 2019
Last visit: 05 Sep 2019
Posts: 66
Own Kudos:
39
 [5]
Given Kudos: 4
Expert
Expert reply
Posts: 66
Kudos: 39
 [5]
An investor purchased 20 shares of a certain stock at a price of $45.7 02 Jun 2019, 23:46
4
Kudos
Add Kudos
1
Bookmarks
Bookmark this Post
Given:

An investor purchased 20 shares of a certain stock at a price of $45.75 per share.

Total money paid for 20 shares = $45.75*20 = $915

Later this investor purchased 30 more shares at a price of $46.25 per share

Total money paid for 30 shares = $46.25*30 = $1387.5

Total money paid for 50 shares = $915 + $1387.5 = $2302.5

The average price per share that this investor paid for the 50 shares = $2302.5/50 = $46.05

The correct answer is D
User avatar
Sri07
User avatar
Joined: 27 Jun 2019
Last visit: 30 Aug 2021
Posts: 45
Own Kudos:
9
Given Kudos: 166
Posts: 45
Kudos: 9
An investor purchased 20 shares of a certain stock at a price of $45.7 06 Oct 2020, 22:01
Kudos
Add Kudos
Bookmarks
Bookmark this Post
VeritasKarishma
BrainLab
An investor purchased 20 shares of certain stock at price of $45.75 per share. Later this investor purchased 30 more shares at price of $46.25 per share. What was the average price per share that this investor paid for the 50 shares?

1. 45.80
2. 45.95
3. 46.00
4. 46.05
5. 46.20

Responding to a pm:

The distance between 45.75 and 46.25 is of $0.5. Weights are in the ratio 2:3 so the distance will split in the ratio 3:2 i.e. average will be $46.05.

This is based on the concept that weighted average splits the distance between C1 and C2 is the ratio which is inverse of the ratio of W1 and W2. This is the same concept on which out formulas based:

W1/W2 = (C2 - Cavg) / (Cavg - C1)

I prefer to not use the formula here but just the concept because the formula will involve some calculations.
Show more


I did not understand this method? Where can I learn about this method?

If the ratio is 2:3 why are we splitting it in 3:2

Please help!

VeritasKarishma
User avatar
MathRevolution
User avatar
Math Revolution GMAT Instructor
Joined: 16 Aug 2015
Last visit: 27 Sep 2022
Posts: 10,070
Own Kudos:
19,389
 [3]
Given Kudos: 4
GMAT 1: 760 Q51 V42
GPA: 3.82
Expert
Expert reply
GMAT 1: 760 Q51 V42
Posts: 10,070
Kudos: 19,389
 [3]
An investor purchased 20 shares of a certain stock at a price of $45.7 07 Oct 2020, 03:22
Kudos
Add Kudos
3
Bookmarks
Bookmark this Post
Approach 1:

Average: \(\frac{Sum }{ Total}\)

The question is based on the weighted average.

Average: \(\frac{[(45.75 * 20) + (46.25 * 30)] }{ 50}\)

=> Average: \(\frac{(915 + 1387.5) }{ 50}\)

=> Average: \(\frac{2,302.5 }{ 50}\)

Average: 46.05

Answer D


Approach 2:

As 20 shares were bought at $45.75 per share and 30 shares are bought at $46.25 per share, then average will be definitely greater than 45.75 because the number of shares and price per share both have increased later.

Increase price: 46.25 - 45.75 = 0.25 per share.

Overall increase: 0.25 * 30 = 15 [Becuase '30' more shares were bought].

This increase of '15' will affect overall 50 shares: \(\frac{15 }{ 50}\) = 0.3

Increase of 0.3 from 45.75 => 45.75 + 0.3 = 46.05

Answer D
avatar
Asariol
avatar
Joined: 28 Sep 2020
Last visit: 19 Jan 2024
Posts: 21
Own Kudos:
5
 [1]
Given Kudos: 49
Posts: 21
Kudos: 5
 [1]
An investor purchased 20 shares of a certain stock at a price of $45.7 07 Oct 2020, 11:22
1
Kudos
Add Kudos
Bookmarks
Bookmark this Post
chetan2u
BrainLab
BrainLab
An investor purchased 20 shares of certain stock at price of $45.75 per share. Later this investor purchased 30 more shares at price of $46.25 per share. What was the average price per share that this investor paid for the 50 shares?

1. 45.80
2. 45.95
3. 46.00
4. 46.05
5. 46.20

Is there some way to avoid intensive calculations ? I've solved it this way.... (at the time I was writing my solution, I saw a much better one :))

\(\frac{45,75*20+30(45,75+0,50)}{50}\) --> \(\frac{50*45,75}{50} + \frac{15}{50}= 45,75+0,3=46,05\)
Answer D

Hi
you dont require to do any intensive calculations if you do by weighted average..
the ratio of shares =2:3 and their price = 45.75:46.25..
the average ratio of total would depend on the ratio of number of shares..
difference in the price = 46.25-45.75=.50..
divide this .50 in the ratio 2:3=.2:.3...
since the number of shares of 46.25 is more, the average will be closer to it...
so average= 46.25- .2=46.05... .2 has come from .2:.3...
D
hope it helps you in reducing your calculations further
Show more

I prefer this method, so I'd like to understand. I get lost in the above highlighted portion. Please explain. I may be getting lost on the concept of dividing a number into a ratio.
User avatar
ScottTargetTestPrep
User avatar
Target Test Prep Representative
Joined: 14 Oct 2015
Last visit: 18 Nov 2025
Posts: 21,712
Own Kudos:
26,990
Given Kudos: 300
Status:Founder & CEO
Affiliations: Target Test Prep
Location: United States (CA)
Expert
Expert reply
Active GMAT Club Expert! Tag them with @ followed by their username for a faster response.
Posts: 21,712
Kudos: 26,990
An investor purchased 20 shares of a certain stock at a price of $45.7 29 Nov 2020, 17:57
Kudos
Add Kudos
Bookmarks
Bookmark this Post
BrainLab
An investor purchased 20 shares of certain stock at price of $45.75 per share. Later this investor purchased 30 more shares at price of $46.25 per share. What was the average price per share that this investor paid for the 50 shares?

1. 45.80
2. 45.95
3. 46.00
4. 46.05
5. 46.20
Show more
Solution:

The average price per share of the stock was:

(20 x 45.75 + 30 x 46.25) / 50

(915 + 1387.5) / 50

2302.5/50 = $46.05

Answer: 4 or D
User avatar
Abhishek009
User avatar
Board of Directors
Joined: 11 Jun 2011
Last visit: 18 Jul 2025
Posts: 5,937
Own Kudos:
5,327
Given Kudos: 463
Status:QA & VA Forum Moderator
Location: India
GPA: 3.5
WE:Business Development (Commercial Banking)
Posts: 5,937
Kudos: 5,327
An investor purchased 20 shares of a certain stock at a price of $45.7 30 Nov 2020, 11:06
Kudos
Add Kudos
Bookmarks
Bookmark this Post
BrainLab
An investor purchased 20 shares of certain stock at price of $45.75 per share. Later this investor purchased 30 more shares at price of $46.25 per share. What was the average price per share that this investor paid for the 50 shares?

1. 45.80
2. 45.95
3. 46.00
4. 46.05
5. 46.20
Show more
\(\frac{20*45.75 + 30*46.25}{50}\)

\(= \frac{915 + 1387.5}{50}\)

\(= 46.05\), Answer must be (4)
User avatar
Sabby
User avatar
Joined: 17 Jun 2018
Last visit: 02 May 2025
Posts: 84
Own Kudos:
106
Given Kudos: 397
Location: France
GPA: 3.85
Posts: 84
Kudos: 106
An investor purchased 20 shares of a certain stock at a price of $45.7 19 Dec 2020, 08:52
Kudos
Add Kudos
Bookmarks
Bookmark this Post
Hi,

For this question, I used the following method involving weighted averages :

Let's set $46 as our base point
We know that 20/50 (2/5) of our shares are at a unit price of $45.75 so -1/4 from our base point
and that 30/50 (3/5) of our shares are at a unit price of $46.25, so 1/4 more than our base point

2/5*-1/4 = -2/20
3/5*1/4 = 3/20
-2/20+3/20= 1/20 = 5/100 = 0,05

Therefore our AVG price per share is our base point $46+0,05 = 46,05$

Answer D)
User avatar
tarunrathi999
User avatar
Joined: 04 Mar 2014
Last visit: 28 Apr 2024
Posts: 18
Own Kudos:
3
Given Kudos: 102
Posts: 18
Kudos: 3
An investor purchased 20 shares of a certain stock at a price of $45.7 10 Jul 2023, 23:15
Kudos
Add Kudos
Bookmarks
Bookmark this Post
Bunuel / GMATNinja looking for more logical approach
User avatar
EMPOWERgmatRichC
User avatar
Major Poster
Joined: 19 Dec 2014
Last visit: 31 Dec 2023
Posts: 21,785
Own Kudos:
12,804
Given Kudos: 450
Status:GMAT Assassin/Co-Founder
Affiliations: EMPOWERgmat
Location: United States (CA)
GMAT 1: 800 Q51 V49
GRE 1: Q170 V170
Expert
Expert reply
GMAT 1: 800 Q51 V49
GRE 1: Q170 V170
Posts: 21,785
Kudos: 12,804
An investor purchased 20 shares of a certain stock at a price of $45.7 11 Jul 2023, 06:45
Kudos
Add Kudos
Bookmarks
Bookmark this Post
tarunrathi999
Bunuel / GMATNinja looking for more logical approach
Show more

Hi tarunrathi999,

While the answers to this question appear 'close together', they're really not (relative to what the question is asking) - meaning that you can solve this problem without actually doing much math.

IF we had an equal number of both types of shares (meaning for every 1 share at $45.75, we'd have 1 share at $46.25), then the average price per share would be $46 exactly. You don't actually have to perform a big calculation to prove that either. Since the first share is 25 cents LESS than $46 and the second share is 25 cents MORE than $46, those differences 'cancel out', leaving us with an average of $46.

The prompt tells us that there are MORE of the $46.25 shares, so the average is clearly going to be greater than $46. That narrows the options down to Answers D and E. However, there are only 20 of the first shares and 30 of the second shares, and Answer E is SO CLOSE to $46.25, that there's no way for that to be the average. There would need to be far more of the second type of shares (proportionately speaking) to drive the average up to $46.20. Since that's not the case, the answer MUST be Answer D.

GMAT assassins aren't born, they're made,
Rich

Contact Rich at: Rich.C@empowergmat.com
www.empowergmat.com
User avatar
bumpbot
User avatar
Non-Human User
Joined: 09 Sep 2013
Last visit: 04 Jan 2021
Posts: 38,588
Own Kudos:
1,079
Posts: 38,588
Kudos: 1,079
An investor purchased 20 shares of a certain stock at a price of $45.7 30 Jul 2025, 04:58
Kudos
Add Kudos
Bookmarks
Bookmark this Post
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).

Want to see all other topics I dig out? Follow me (click follow button on profile). You will receive a summary of all topics I bump in your profile area as well as via email.
Moderators:
Bunuel
Math Expert
105355 posts
Krunaal
Tuck School Moderator
805 posts