John bought 2 shares and sold them for $96 each. If he had a profit of 20% on the sale of one of the shares but a loss of 20% on the sale of the other share, then on the sale of both shares John had...
A. a profit of $10
B. a profit of $8
C. a loss of $8
D. a loss of $10
E. neither a profit nor a loss
The OA is C.
I'm really confused with this PS question. Experts, any suggestion about how to solve it? Thanks in advance.
John bought 2 shares and sold them for $96 each...
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Say the cost of the shares on which John had a 20% profit was 'C.' Thus the cost was C and the profit was .20C. If we add the profit to the cost, we'll have our revenue, thus .20C + C = 96LUANDATO wrote:John bought 2 shares and sold them for $96 each. If he had a profit of 20% on the sale of one of the shares but a loss of 20% on the sale of the other share, then on the sale of both shares John had...
A. a profit of $10
B. a profit of $8
C. a loss of $8
D. a loss of $10
E. neither a profit nor a loss
The OA is C.
I'm really confused with this PS question. Experts, any suggestion about how to solve it? Thanks in advance.
1.2C = 96
C = 96/1.2 = 80.
Profit = 96 - 80 = 16
Similarly, if the shares on which John had a 20% loss had a cost of X, then the profit would have been -.20X. Now X + (-.20X) = 96
..80X = 96
X = 96/.80
X = 120
Profit = 96 - 120 = -24.
Net: 16 + (-24) = -8. The answer is C
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Note also that when John earns a profit, it means that the initial cost of the stock would have been some value less than the 96 he sold it for. So he's earning 20% of some value LESS than 96.
When John incurs a loss, it means the initial cost of the stock would have been some value greater than 96, so he's losing 20% of some value GREATER than 96.
Taken together, we see that he must have suffered a loss, allowing us to immediately eliminate A, B, and E.
When John incurs a loss, it means the initial cost of the stock would have been some value greater than 96, so he's losing 20% of some value GREATER than 96.
Taken together, we see that he must have suffered a loss, allowing us to immediately eliminate A, B, and E.
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BTGmoderatorLU wrote:John bought 2 shares and sold them for $96 each. If he had a profit of 20% on the sale of one of the shares but a loss of 20% on the sale of the other share, then on the sale of both shares John had...
A. a profit of $10
B. a profit of $8
C. a loss of $8
D. a loss of $10
E. neither a profit nor a loss
The OA is C.
I'm really confused with this PS question. Experts, any suggestion about how to solve it? Thanks in advance.
For the one share earning a 20% profit, we can set up the following equation in which c = cost:
Profit = 0.2c
96 - c = 0.2c
96 = 1.2c
80 = c
Thus, John made 96 - 80 = 16 dollars on the sale.
For the share with a 20% loss, we can set up the following equation in which c = cost:
Profit = -0.2c
96 - c = -0.2c
96 = 0.8c
120 = c
Thus, John lost 120 - 96 = 24 dollars on the sale.
So, overall he lost 8 dollars.
Answer: C
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