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Abhi077
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Joined: 25 Sep 2018
Last visit: 18 Apr 2025
Posts: 1,084
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Location: United States (CA)
Concentration: Finance, Strategy
Schools: Rotman '21 Jindal '21 Stern '21
GPA: 3.97
WE:Investment Banking (Finance: Investment Banking)
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07 Dec 2020, 07:19
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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:
95%
(hard)
Question Stats:
33% (02:58) correct
67%
(02:47)
wrong
based on 116
sessions
History
Date
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Result
Not Attempted Yet
The price per share of stock P increased by a percent over the same time period that the price per share of stock Q decreased by b percent. The increased price per share of stock P equals the original price per share of stock Q. Was the reduced price per share of stock Q more than the original price per share of stock P?
(1) a ≥ b
(2) a ≤ b
(1) a ≥ b
(2) a ≤ b
08 Dec 2020, 12:14
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The question is actually asking about a fairly simple situation, but it is disguising that fact by discussing two different types of stock.
We have stock P. It increases by a%. It then equals the starting price of stock Q. Stock Q then decreases by b%, and we want to know if P's starting price exceeds Q's final price. Notice we can just ignore stock Q altogether -- the question just amounts to:
Stock P increases by a%, and then decreases by b%. Did stock P lose money?
Naturally if b > a, stock P will lose money, because we not only have a larger percent decrease than increase, in percentage points, but we're taking that decrease from a larger total amount. So Statement 2 is sufficient alone. Statement 1 is not, because if, say, a = b, then stock P would lose money for sure, but if b = 0, then stock P would profit for sure.
We have stock P. It increases by a%. It then equals the starting price of stock Q. Stock Q then decreases by b%, and we want to know if P's starting price exceeds Q's final price. Notice we can just ignore stock Q altogether -- the question just amounts to:
Stock P increases by a%, and then decreases by b%. Did stock P lose money?
Naturally if b > a, stock P will lose money, because we not only have a larger percent decrease than increase, in percentage points, but we're taking that decrease from a larger total amount. So Statement 2 is sufficient alone. Statement 1 is not, because if, say, a = b, then stock P would lose money for sure, but if b = 0, then stock P would profit for sure.
General Discussion
14 May 2025, 09:17
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