NEW HERE? LEARN MORE
closeclose
Last visit was: 26 Apr 2024, 18:57 It is currently 26 Apr 2024, 18:57
Decision Tracker
My Rewards
New posts
New comers' posts

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

Even when the price of a stock is range-bound for several months, the

SORT BY:
Date
Kudos
Tags:
Find Similar Topics 
Show Tags
Hide Tags
User avatar
L
Bunuel
Math Expert
Joined: 02 Sep 2009
Posts: 92948
Own Kudos [?]: 619248 [1]
Given Kudos: 81609
Send PM
CAT Tests Forum Quiz Mode
Even when the price of a stock is range-bound for several months, the [#permalink] New post   06 Jul 2018, 02:50
1
Kudos
Expert Reply
00:00
A
B
C
D
E

Difficulty:

5% (low)

Question Stats:

92% (00:58) correct 8% (01:08) wrong based on 148 sessions
Hide Show timer Statistics
Even when the price of a stock is range-bound for several months, the volatility of its price within that range can swell the call option premium: the more the price of the stock moves, then the price of the stock's call options will be higher as a result.


A. the more the price of the stock moves, then the price of the stock's call options will be higher as a result
B. if the price of the stock has more movement, then the price of the stock's call options will be high
C. the more movement the price of the stock has, it is that much higher that the price of the stock's call options will be
D. the more the price of the stock moves, the higher the price of the stock's call options will be
E. when the price of the stock moves more, then the higher the price of the stock's call options
ShowHide Answer
Official Answer
D
User avatar
P
GyMrAT
Senior Manager
Senior Manager
Joined: 14 Dec 2017
Posts: 426
Own Kudos [?]: 459 [1]
Given Kudos: 173
Location: India
Send PM
Re: Even when the price of a stock is range-bound for several months, the [#permalink] New post   06 Jul 2018, 04:29
1
Kudos
Bunuel wrote:
Even when the price of a stock is range-bound for several months, the volatility of its price within that range can swell the call option premium: the more the price of the stock moves, then the price of the stock's call options will be higher as a result.


A. the more the price of the stock moves, then the price of the stock's call options will be higher as a result
B. if the price of the stock has more movement, then the price of the stock's call options will be high
C. the more movement the price of the stock has, it is that much higher that the price of the stock's call options will be
D. the more the price of the stock moves, the higher the price of the stock's call options will be
E. when the price of the stock moves more, then the higher the price of the stock's call options



Answer B.

Correct parallelism of "If X....then Y...."

Conditional in meaning, X causes Y.


Thanks,
GyM
avatar
B
kplusprinja1988
Intern
Intern
Joined: 13 Apr 2015
Posts: 27
Own Kudos [?]: 15 [0]
Given Kudos: 2
Schools: Rotman '17 UT Dallas FLEX & Online'18
Send PM
GMAT ToolKit User
Re: Even when the price of a stock is range-bound for several months, the [#permalink] New post   06 Jul 2018, 05:08
Answer should be D.

The more...the higher..

It is similar to a OG question which talks about watt power rating
User avatar
P
GyMrAT
Senior Manager
Senior Manager
Joined: 14 Dec 2017
Posts: 426
Own Kudos [?]: 459 [0]
Given Kudos: 173
Location: India
Send PM
Re: Even when the price of a stock is range-bound for several months, the [#permalink] New post   06 Jul 2018, 05:35
kplusprinja1988 wrote:
Answer should be D.

The more...the higher..

It is similar to a OG question which talks about watt power rating



Yeah i guess it could be D. The "will be" at the end put me off.

here's the OG reference https://gmatclub.com/forum/manufacturers-rate-batteries-in-watt-hours-if-they-rate-the-132414.html

"the higher.....the more" is used in this question.

Can think of few more usages now

"the sooner...the better"

"the more.....the merrier"

"The longer......the more..."

"the more.....the more..."

"the more.....the better...."

Although i don't know the grammar behind it.

Maybe mikemcgarry can help out.



Thanks,
GyM
User avatar
G
SonalSinha803
Senior Manager
Senior Manager
Joined: 14 Feb 2018
Posts: 314
Own Kudos [?]: 290 [0]
Given Kudos: 29
Send PM
Re: Even when the price of a stock is range-bound for several months, the [#permalink] New post   06 Jul 2018, 05:57
The question throws a parallelism issue. A, C and E can easily be eliminated.

B. if the price of the stock ((has more movement,)) then the price of the stock's call options will be high - movement ?? Incorrect use of words.

D. //the more the price// of the stock moves, //the higher the price// of the stock's call options will be - parallel and correct meaning is conveyed.

Thus, D is best.

Sent from my Lenovo K53a48 using GMAT Club Forum mobile app
User avatar
P
sudarshan22
Retired Moderator
Joined: 30 Jan 2015
Posts: 636
Own Kudos [?]: 2427 [0]
Given Kudos: 1131
Location: India
Concentration: Operations, Marketing
GPA: 3.5
Send PM
Re: Even when the price of a stock is range-bound for several months, the [#permalink] New post   06 Jul 2018, 08:11
D over B.

B. if the price of the stock has more movement, then the price of the stock's call options will be high --> Incorrect

D. the more the price of the stock moves, the higher the price of the stock's call options will be --> Correct

Hence, D.
avatar
B
EDAXavier
Intern
Intern
Joined: 17 Jun 2018
Posts: 5
Own Kudos [?]: 7 [0]
Given Kudos: 51
Send PM
Re: Even when the price of a stock is range-bound for several months, the [#permalink] New post   06 Jul 2018, 14:23
D over B.
Meaning of the sentence helped me to make the final decision between B and D.
Choice B is a conditional sentence. If x, then y. This kind of sentence construction means if condition X happens, then event Y happens.
In here means if the price of the stock has more movement, then the price of call options will be high. THIS IS WRONG.
The volatility of a stock is not the only factor to determine the price of the option.
It is more precise to say the more the price of the stock moves, the higher the price of the stock's call options will be
User avatar
L
dcummins
VP
VP
Joined: 14 Feb 2017
Posts: 1115
Own Kudos [?]: 2164 [0]
Given Kudos: 368
Location: Australia
Concentration: Technology, Strategy
Schools: INSEAD Sept'21 Intake (WA$) Melbourne (A$) AGSM (A$) Kellogg '23 (WL) Said '22 (A$) CBS '23 (D) Booth '23 (D) Anderson '23 (WL) Cambridge '22 (WL) LBS '23 (D) Stern '24 (WA)
GMAT 1: 560 Q41 V26
GMAT 2: 550 Q43 V23
GMAT 3: 650 Q47 V33
GMAT 4: 650 Q44 V36
GMAT 5: 600 Q38 V35
GMAT 6: 710 Q47 V41
WE:Management Consulting (Consulting)
Send PM
Reviews Badge
Re: Even when the price of a stock is range-bound for several months, the [#permalink] New post   20 Jun 2019, 18:07
the [comparative adjective][clause #1], the [comparative adjective][clause #2]

The greater the X, the greater the Y

The higher they fly, the harder they fall...
GMAT Club Bot
gmatclubot
Re: Even when the price of a stock is range-bound for several months, the [#permalink]
20 Jun 2019, 18:07
Moderators:
GMATNinja
GMAT Club Verbal Expert
6923 posts
GMATNinjaTwo
GMAT Club Verbal Expert
238 posts

Powered by phpBB © phpBB Group | Emoji artwork provided by EmojiOne
Main navigation
GMAT Resources
Partners
MBA Resources
www.gmac.com|www.mba.com | | GMAT Club Rules | Terms and Conditions