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Register now and save up to $200 Available with Beat the GMAT members only code • 5-Day Free Trial 5-day free, full-access trial TTP Quant Available with Beat the GMAT members only code • Magoosh Study with Magoosh GMAT prep Available with Beat the GMAT members only code • Free Practice Test & Review How would you score if you took the GMAT Available with Beat the GMAT members only code ## Last year the price per share of Stock X increased tagged by: Brent@GMATPrepNow This topic has 3 expert replies and 0 member replies rsarashi Master | Next Rank: 500 Posts Joined 24 Dec 2016 Posted: 186 messages Followed by: 2 members Upvotes: 5 #### Last year the price per share of Stock X increased Wed Apr 19, 2017 9:16 am Last year the price per share of Stock X increased by k percent and the earnings per share of Stock X increased by m percent, where k is greater than m. By what percent did the ratio of price per share to earnings per share increase, in terms of k and m? A. k/m % B. (k - m) % C. [100(k - m)] / (100 + k) % D. [100(k - m)] / (100 + m) % E. [100(k - m)] / (100 + k + m) % OAD Need free GMAT or MBA advice from an expert? Register for Beat The GMAT now and post your question in these forums! ### GMAT/MBA Expert GMATGuruNY GMAT Instructor Joined 25 May 2010 Posted: 13605 messages Followed by: 1796 members Upvotes: 13060 GMAT Score: 790 Top Reply Wed Apr 19, 2017 11:31 am rsarashi wrote: Last year the price per share of Stock X increased by k percent and the earnings per share of Stock X increased by m percent, where k is greater than m. By what percent did the ratio of price per share to earnings per share increase, in terms of k and m? A. k/m % B. (k - m) % C. [100(k - m)] / (100 + k) % D. [100(k - m)] / (100 + m) % E. [100(k - m)] / (100 + k + m) % OAD An alternate approach is to combine plugging in values with a bit of algebra. Old ratio: Let the original price = 100 and the original earnings = 100. Original ratio of price to earnings = 100/100 = 1. New ratio: Price increased by k% = 100 + (k/100)(100) = 100 + k. Earnings increased by m% = 100 + (m/100)(100) = 100 + m. New ratio = (100+k)/(100+m). Difference between the ratios: (100+k)/(100+m) - 1 = [(100+k) - (100+m)] / (100+m) = (k-m)/(100+m). Percent change in the ratios = (difference between the ratios)/(original ratio) * 100: [(k-m)/(100+m)] / 1 * 100 = [100(k-m)] / (100+m). The correct answer is D. _________________ Mitch Hunt GMAT Private Tutor GMATGuruNY@gmail.com If you find one of my posts helpful, please take a moment to click on the "Thank" icon. Available for tutoring in NYC and long-distance. For more information, please email me at GMATGuruNY@gmail.com. Thanked by: rsarashi Free GMAT Practice Test How can you improve your test score if you don't know your baseline score? Take a free online practice exam. Get started on achieving your dream score today! Sign up now. ### GMAT/MBA Expert DavidG@VeritasPrep Legendary Member Joined 14 Jan 2015 Posted: 2457 messages Followed by: 115 members Upvotes: 1153 GMAT Score: 770 Top Reply Wed Apr 19, 2017 10:31 am It's worth noting that on these types of questions, the correct answers seem to be disproportionately weighted towards D and E. (At least they are in the Official Guide - most test-takers will start with A and work their way down, so if the correct answer is D or E, the problem is more time consuming.) When I'm picking numbers, I like to start with E and work my way up. _________________ Veritas Prep | GMAT Instructor Veritas Prep Reviews Save$100 off any live Veritas Prep GMAT Course

Thanked by: rsarashi
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### GMAT/MBA Expert

GMATGuruNY GMAT Instructor
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Wed Apr 19, 2017 11:31 am
rsarashi wrote:
Last year the price per share of Stock X increased by k percent and the earnings per share of Stock X increased by m percent, where k is greater than m. By what percent did the ratio of price per share to earnings per share increase, in terms of k and m?

A. k/m %
B. (k - m) %
C. [100(k - m)] / (100 + k) %
D. [100(k - m)] / (100 + m) %
E. [100(k - m)] / (100 + k + m) %

An alternate approach is to combine plugging in values with a bit of algebra.

Old ratio:
Let the original price = 100 and the original earnings = 100.
Original ratio of price to earnings = 100/100 = 1.

New ratio:
Price increased by k% = 100 + (k/100)(100) = 100 + k.
Earnings increased by m% = 100 + (m/100)(100) = 100 + m.
New ratio = (100+k)/(100+m).

Difference between the ratios:
(100+k)/(100+m) - 1 = [(100+k) - (100+m)] / (100+m) = (k-m)/(100+m).

Percent change in the ratios = (difference between the ratios)/(original ratio) * 100:
[(k-m)/(100+m)] / 1 * 100 = [100(k-m)] / (100+m).

_________________
Mitch Hunt
GMAT Private Tutor
GMATGuruNY@gmail.com
If you find one of my posts helpful, please take a moment to click on the "Thank" icon.
Available for tutoring in NYC and long-distance.

Thanked by: rsarashi
Free GMAT Practice Test How can you improve your test score if you don't know your baseline score? Take a free online practice exam. Get started on achieving your dream score today! Sign up now.

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