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The price of stock decreased by 8% last year and rose by 10% this year...

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by BTGmoderatorLU » Fri Mar 20, 2020 11:42 am

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Answers

A

B

C

D

E

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Difficulty—

Source: Economist GMAT

The price of stock decreased by 8% last year and rose by 10% this year. What is the net percentage change in the price of the stock?

A. 0.2%
B. 0.8%
C. 1.2%
D. 1.6%
E. 2%

The OA is C
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Re: The price of stock decreased by 8% last year and rose by 10% this year...

by deloitte247 » Sat Mar 21, 2020 10:03 am
- Let the original stock price = 100%
- Last year, the stock price decreased by 8% = 100 - 8 = 92%
- Stock price last year was 92% of the original stock price
- Stock price increase by 10% this year
- The new stock price = 92% + 9.2% = 101.2%
Net percentage change in the price of stock =
$$\frac{new\ price\ -\ original\ price}{original\ price}\cdot\frac{100}{1}$$
$$=\frac{101.2\%-100\%}{100\%}\cdot\frac{100}{1}$$
$$=1.2\%$$

Answer = C
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Re: The price of stock decreased by 8% last year and rose by 10% this year...

by Scott@TargetTestPrep » Thu Mar 26, 2020 1:36 pm
BTGmoderatorLU wrote: ↑
Fri Mar 20, 2020 11:42 am
 Source: Economist GMAT

The price of stock decreased by 8% last year and rose by 10% this year. What is the net percentage change in the price of the stock?

A. 0.2%
B. 0.8%
C. 1.2%
D. 1.6%
E. 2%

The OA is C
We can let the original price of the stock = $100. Therefore, the new price of the stock is:

100 x 0.92 x 1.1 = 92 x 1.1 = $101.2

We see that $101.2 is 1.2% higher than $100.

Answer: C

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