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Sachin9
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Over a period of 2 years 06 Jan 2013, 03:55
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Kindly help with this IR Q. PFA

Answers are indicated with green arrow.
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File comment: IR Question from Veritas Prep Free CAT
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Assume A10 & B10 are the share price in 2010 for Share A & Share B respectively.

Similarly A12 & B12 are the share price in 2012.


Value of B in 2010

A10 + B10 = N

A10/B10 = 0.8

Therefore , 0.8 * B10 + B10 = N

1.8 *B10 = N or B10 = N/1.8




A12/B12 = ?


A = A12 -A10 /A10 = A12 / A10 - 1


A+1 = A12/A10 =>A12 = A10 (A+1)

B = B12 - B10 / B10 = B12 / B10 -1

B+1 = B12/B10 =>B12 = B10 (B+1)


A12/B12 = A10 (A+1) / B10 (B+1) or 0.8 * (A+1) / (B+1)
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None of the option is correct. :evil:
For 2nd part, correct answer = 0.8 [(100 + A) / (100 + B)]

2nd column D will only be correct if the following statement stated as below:
"The percent change in quantity of X is calculated using the formula:
(Xnew - Xold) / Xold
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Over a period of 2 years 08 Jan 2013, 22:18
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The ratio 2012 is having wrong options...
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Shashank3016
None of the option is correct. :evil:
For 2nd part, correct answer = 0.8 [(100 + A) / (100 + B)]

2nd column D will only be correct if the following statement stated as below:
"The percent change in quantity of X is calculated using the formula:
(Xnew - Xold) / Xold
Show more

agreed. for second part, the ratio of stock A to Stock B in 2012 = 0.8 * (100+a) / (100+b)
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Sachin9
Kindly help with this IR Q. PFA

Answers are indicated with green arrow.
Show more

First of all the options are correct.
Now the most important point is the Easiest way to solve this question. Here it comes--- :-D

Lets assume price of stock A in 2010 = 80 (Pick any easy number)
Lets assume price of stock B in 2010 = 100 (Pick any easy number so that ratio of A/B is 0.8)
(We need to search for an option that will be equal to 100)

Because both A & B indicates percentage change in prices, lets assume A = B = 10% = 0.1(Pick any easy number)

So the price of Stock A in 2012 will be = 80 + 8 = 88
So the price of Stock B in 2012 will be = 100 + 10 = 110
So the ratio of Stock prices in 2012 will be = 88/110 = 8/10 = 0.8
(We need to search for an option that will be equal to 0.8)

Just put these values and you will get the answer.


Hope many will find it useful.

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A12=A10 (1+A/100)

so the wrong answer for the second question.
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Hello from the GMAT Club BumpBot!

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