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Over a period of 2 years from 2010 to 2012, Stock A and Stock B have

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Joined: 02 Nov 2016
Posts: 4931
GPA: 3.39
Over a period of 2 years from 2010 to 2012, Stock A and Stock B have  [#permalink]

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New post 31 Oct 2019, 23:34
Project IR Butler 2019-20 - Get one IR Question Everyday
Question # 41, Date : 10-Nov-2019
This post is a part of Project IR Butler 2019-20. Click here for Details


Over a period of 2 years from 2010 to 2012, Stock A and Stock B have changed in value. In 2010, a share of Stock A and a share of Stock B were, together, worth a total of N dollars. Also, in 2010, the ratio of the price of Stock A to Stock B was 0.8. A and B represent the percent change in value of stocks A and B, respectively from 2012 to 2012. The percent change in a quantity X is calculated using the formula:

\(100∗\frac{X_{new}−X_{old}}{X_{old}}\)

In the table, select the expression that represents the value of Stock B in 2010 and the expression that represents the ratio of Stock A to Stock B in 2012. Make only two selections, one in each column.

Value of Stock B in 2010Ratio in 2012Values
N/0.8
N/1.2
N/1.8
A/0.8+B/1.25N
0.8((1+A)/(1+B))
1.25((1+A)/(1+B))


Spoiler: :: OA
Value of Stock B in 2010Ratio in 2012Values
N/0.8
N/1.2
N/1.8
A/0.8+B/1.25N
0.8((1+A)/(1+B))
1.25((1+A)/(1+B))

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Re: Over a period of 2 years from 2010 to 2012, Stock A and Stock B have  [#permalink]

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New post 27 Dec 2019, 11:06
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Re: Over a period of 2 years from 2010 to 2012, Stock A and Stock B have  [#permalink]

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New post 05 Jan 2020, 08:30
For the first column:
Let the value of stock A and the value of stock B be SA and SB.
We know that \(SA+SB= N \)and that \(SA/SB=0.8\). Therefore \(SB+0.8SB=N \)-> \(SB=N/1.8\)

For the second column, we are asked SA/SB in year 2012. Since the increase in percentage is A and B, SA in 2012 will be equal to \(SA*(1+A) \)and SB will be \(SB*(1+B)\).
Then, \(SA/SB (in 2012) = \frac{SA*(1+A)}{SB*(1+B)}\). Since we know that SA/SB is 0.8, the answer is \(\frac{0.8*(1+A)}{(1+B)}\)
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Re: Over a period of 2 years from 2010 to 2012, Stock A and Stock B have   [#permalink] 05 Jan 2020, 08:30
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