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In 2004, Jack invested x dollars in Stock A and y dollars in Stock B

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In 2004, Jack invested x dollars in Stock A and y dollars in Stock B  [#permalink]

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New post 11 Dec 2018, 08:40
1
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A
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C
D
E

Difficulty:

  75% (hard)

Question Stats:

51% (02:18) correct 49% (01:50) wrong based on 43 sessions

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In 2004, Jack invested x dollars in Stock A and y dollars in Stock B. In that year, the price of Stock A increased by 10% while price of Stock B increased by 8%. In 2005, Jack continued to hold the two stocks and added m dollars in Stock A and n dollars in Stock B. In that year, the price of Stock A increased by 8% and the price of Stock B increased by 10%. If Jack did not sell any stocks, at the end of the year, which stocks value was greater?

(1) x>y

(2) m>n

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Re: In 2004, Jack invested x dollars in Stock A and y dollars in Stock B  [#permalink]

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New post 11 Dec 2018, 09:11
rohan2345 wrote:
In 2004, Jack invested x dollars in Stock A and y dollars in Stock B. In that year, the price of Stock A increased by 10% while price of Stock B increased by 8%. In 2005, Jack continued to hold the two stocks and added m dollars in Stock A and n dollars in Stock B. In that year, the price of Stock A increased by 8% and the price of Stock B increased by 10%. If Jack did not sell any stocks, at the end of the year, which stocks value was greater?

(1) x>y

(2) m>n


We are given only the relation between the amounts invested in each of the stocks in respective years. We are not given anything about the relationship between the price of stocks. So we cannot conclude anything about the final value of the stocks. So answer is E.

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In 2004, Jack invested x dollars in Stock A and y dollars in Stock B  [#permalink]

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New post 21 Mar 2019, 04:03
In 2004, Jack invested x dollars in Stock A and y dollars in Stock B. In that year, the price of Stock A increased by 10% while price of Stock B increased by 8%. In 2005, Jack continued to hold the two stocks and added m dollars in Stock A and n dollars in Stock B. In that year, the price of Stock A increased by 8% and the price of Stock B increased by 10%. If Jack did not sell any stocks, at the end of the year, which stocks value was greater?

The value of stock A should be (x*1.1+m)*1.08=1.188x+1.08m (First Equation), and
The value of stock B should be (y*1.08+n)*1.1=1.188y+1.1n (Second Equation)

VeritasKarishma or Bunuel can u help, unable to understand - If I know X is greater than Y and M is greater than N. Then why can't the first equation be greater than second ?

Why E and not C?
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Re: In 2004, Jack invested x dollars in Stock A and y dollars in Stock B  [#permalink]

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New post 21 Mar 2019, 06:31
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MBA20 wrote:
In 2004, Jack invested x dollars in Stock A and y dollars in Stock B. In that year, the price of Stock A increased by 10% while price of Stock B increased by 8%. In 2005, Jack continued to hold the two stocks and added m dollars in Stock A and n dollars in Stock B. In that year, the price of Stock A increased by 8% and the price of Stock B increased by 10%. If Jack did not sell any stocks, at the end of the year, which stocks value was greater?

The value of stock A should be (x*1.1+m)*1.08=1.188x+1.08m (First Equation), and
The value of stock B should be (y*1.08+n)*1.1=1.188y+1.1n (Second Equation)

VeritasKarishma or Bunuel can u help, unable to understand - If I know X is greater than Y and M is greater than N. Then why can't the first equation be greater than second ?

Why E and not C?


You have to compare

1.188x + 1.08m ?? 1.188y + 1.1n

If x > y, then 1.188x > 1.188y
and m > n, then can we say that 1.08m > 1.1n? No. Because 1.08 is less than 1.1.

Take another example.

Given that a > b, is 10a > 30b?
If a = 2 and b = 1, then no because 10*2 is not > 30*1
If a = 4 and b =1 , then yes because 10*4 > 30*1

So that is the logic in this question too.

If x = 1.011, y = 1.01
and m = 1.011, n = 1.01

1.188*1.011 + 1.08*1.011 ?? 1.188*1.01 + 1.1*1.01
2.292948 < 2.31088

Hence it is not always necessary that first expression is greater.
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Re: In 2004, Jack invested x dollars in Stock A and y dollars in Stock B  [#permalink]

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New post 22 Mar 2019, 06:44
rohan2345 wrote:
In 2004, Jack invested x dollars in Stock A and y dollars in Stock B. In that year, the price of Stock A increased by 10% while price of Stock B increased by 8%. In 2005, Jack continued to hold the two stocks and added m dollars in Stock A and n dollars in Stock B. In that year, the price of Stock A increased by 8% and the price of Stock B increased by 10%. If Jack did not sell any stocks, at the end of the year, which stocks value was greater?

(1) x>y

(2) m>n



Dear Rohan,

Great question testing our ability to clear mind from any assumptions. But please edit the answer: price of stocks do not directly correlates with an investments of an individual.
You are asking about value of Jacks stocks bundle, but not about market price of stock, aren't you?
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Re: In 2004, Jack invested x dollars in Stock A and y dollars in Stock B   [#permalink] 22 Mar 2019, 06:44
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In 2004, Jack invested x dollars in Stock A and y dollars in Stock B

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