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catinabox
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Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
45%
(medium)
Question Stats:
71% (02:07) correct
29%
(02:28)
wrong
based on 1111
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History
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A day trader bought 50 shares of one of the companies shown in the graph, at the stock prices (in dollars) indicated in the graph above. He purchased the shares at 9:00, when the market opened, and sold all 50 shares at 13:00.
Select from each drop-down menu the option that creates the most accurate statement, given the information provided.
If the trader made a total profit of $250 on that day, he bought shares of , which at the market close at 16:00 had an overall price change of approximately .
Attachment:
GMAT-Club-Forum-p0uhpuoq.png [ 103.75 KiB | Viewed 5353 times ]
Official Solution:
Drop-down 1:
We are told that the day trader made a total profit of $250 from trading 50 shares of a particular company.
Since profit = (selling price – buying price) × number of shares, the stock price must have increased by $250 ÷ 50 = $5 between 9:00 and 13:00.
We need to identify the company whose stock price increased by $5 during that time period. Note that the graph shows stock prices beyond 13:00, but only the price change from 9:00 to 13:00 is relevant to the trader’s profit.
From 9:00 to 13:00, the following price changes occurred. We should check all companies to be certain. No calculator is needed — we can quickly note the differences and identify which company had a price increase of $5.
Company A: 55 → 65, a change of +10
Company B: 20 → 30, a change of +10
Company C: 105 → 110, a change of +5 — Correct
Company D: 65 → 50, a change of –15
Drop-down 2:
At the market close at 16:00, Company C had an overall price change of +$10, from $105 to $115.
Correct answer:
Dropdown 1: "Company C"
Dropdown 2: "+$10"
_________________
Bunuel
Drop-down 1:
We are told that the day trader made a total profit of $250 from trading 50 shares of a particular company.
Since profit = (selling price – buying price) × number of shares, the stock price must have increased by $250 ÷ 50 = $5 between 9:00 and 13:00.
We need to identify the company whose stock price increased by $5 during that time period. Note that the graph shows stock prices beyond 13:00, but only the price change from 9:00 to 13:00 is relevant to the trader’s profit.
From 9:00 to 13:00, the following price changes occurred. We should check all companies to be certain. No calculator is needed — we can quickly note the differences and identify which company had a price increase of $5.
Company A: 55 → 65, a change of +10
Company B: 20 → 30, a change of +10
Company C: 105 → 110, a change of +5 — Correct
Company D: 65 → 50, a change of –15
Drop-down 2:
At the market close at 16:00, Company C had an overall price change of +$10, from $105 to $115.
Correct answer:
Dropdown 1: "Company C"
Dropdown 2: "+$10"
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General Discussion
Great question! Different!
I see the 13:00 and 16:00 - is that on purpose to make it trickier? I assume so.
Should it say "must have purchased" instead of "most likely"?
_________________
I see the 13:00 and 16:00 - is that on purpose to make it trickier? I assume so.
Should it say "must have purchased" instead of "most likely"?
_________________
catinabox
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Joined: 27 Nov 2019
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Location: United States (IL)
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bb
Yes, the timings are different to make sure you read the question correctly and not jump to conclusions!
The reason I say 'most likely' is because the value of $250 is approximate. Test takers are expected to eye ball the values so in reality there could be a slight variation in the total profit of $250. However, that variation is small enough that no other option comes close.
Posts: 98
The traps laid in this Q are subtle. Indeed a great question!
Posts: 4
explain plz
catinabox
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Joined: 27 Nov 2019
Last visit: 02 Jun 2026
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Location: United States (IL)
Schools: Kellogg '24 (M)
GMAT 1: 770 Q50 V44
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We've been told that the day trader makes a profit of $250 after trading 50 stocks of a particular company.
This means that the stock he bought had a change of 250/50 = $5 from 9 AM to 13:00.
So we are looking for a stock that had gone up by $5 in that time frame. Note that the chart goes beyond 13:00.
In this time from 9 to 13:00 the following price changes occurred. Note that we should check all of them to be safe. You do not need a calculator but can quickly note the differences and which one will be equal to 5.
Company A goes 55 -> 65, i.e. a change of +10
Company B goes 20 -> 30, i.e a change of +10
Company C goes 105 -> 110. i.e. a Change of +5 CORRECT
Company D goes 65 -> 50, i.e a change of -15
The Answer is Company C.
In the second part, we've been asked how much the stock has changed by closing time at 16:00. This is a trap in case you look at 13:00 instead of 16:00.
Therefore, at 16:00, Stock C is at $115, i.e. the change is 115-105 = +$10.
GMAT-Club-Forum-7h1x62tx.png [ 91.48 KiB | Viewed 4426 times ]
This means that the stock he bought had a change of 250/50 = $5 from 9 AM to 13:00.
So we are looking for a stock that had gone up by $5 in that time frame. Note that the chart goes beyond 13:00.
In this time from 9 to 13:00 the following price changes occurred. Note that we should check all of them to be safe. You do not need a calculator but can quickly note the differences and which one will be equal to 5.
Company A goes 55 -> 65, i.e. a change of +10
Company B goes 20 -> 30, i.e a change of +10
Company C goes 105 -> 110. i.e. a Change of +5 CORRECT
Company D goes 65 -> 50, i.e a change of -15
The Answer is Company C.
In the second part, we've been asked how much the stock has changed by closing time at 16:00. This is a trap in case you look at 13:00 instead of 16:00.
Therefore, at 16:00, Stock C is at $115, i.e. the change is 115-105 = +$10.
Attachment:
GMAT-Club-Forum-7h1x62tx.png [ 91.48 KiB | Viewed 4426 times ]
miag
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Expert reply
can you explain calculation of dropdown 2
catinabox
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miag
You need to find the difference in price of Stock A between 16:00 hours to 09:00 hours. That difference is $10.
What someone might miss is that dropdown 2 is asking you to look at 16:00 hours, not 13:00 hours, which is the first part of the question.
Posts: 189
for the 2nd drop down, when you say approximate price change you mean from 9.00 am - 16.00 pm and not from when the dealer sold the stock that is from 13.00 pm to 16.00 pm? Bunuel - please brief. I picked +5 considering from 13.00 he sold for 110 and at the end it is 115
catinabox
SwethaReddyL
Yes, the second drop-down refers to the overall price change for that company from market open at 9:00 to market close at 16:00.
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