101mba101 wrote:
An investor purchased a bond for p dollars on Monday. For a certain number of days, the value of the bond increased by r percent per day. After this period of constant increase, the bond decreased the next day by q dollars and the investor decided to sell the bond that day for v dollars. When did the investor sell the bond if
\(r = 100*[\sqrt{\frac{(v+q)}{p}} - 1]\)?
A. Two working days later.
B. Three working days later.
C. Four working days later.
D. Five working days later.
E. Six working days later.
Okay I think I got a shortcut method here and I am not sure whether anyone else has suggested this.
In the question the value of r has a square root in it, meaning that in the compound interest formula, the value n = 2. This means that if the bond was purchased on Monday, then value of n on Monday would be 0, on Tuesday, it would be 1, and on Wednesday, it would the 2. On Thursday, the price falls and the bond is sold that very day.
Tuesday is one working day later
Wednesday is two working days later
Thursday is three working days later
Hence, answer is B.
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Vaibhav
Sky is the limit. 800 is the limit.
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