Did Insurance Company $$K$$ have more than $300 million in This topic has expert replies Moderator Posts: 1896 Joined: 29 Oct 2017 Followed by:2 members Did Insurance Company $$K$$ have more than$300 million in

by AAPL » Fri Jul 12, 2019 4:04 am

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Official Guide

Did Insurance Company $$K$$ have more than $300 million in total net profits last year? 1. Last year Company $$K$$ paid out$0.95 in claims for every dollar of premiums collected.
2. Last year Company $$K$$ earned a total of $150 million in profits from the investment of accumulated surplus premium from previous years. OA E GMAT/MBA Expert GMAT Instructor Posts: 15628 Joined: 08 Dec 2008 Location: Vancouver, BC Thanked: 5254 times Followed by:1266 members GMAT Score:770 by [email protected] » Fri Jul 12, 2019 4:53 am Timer 00:00 Your Answer A B C D E Global Stats AAPL wrote:Official Guide Did Insurance Company $$K$$ have more than$300 million in total net profits last year?

1. Last year Company $$K$$ paid out $0.95 in claims for every dollar of premiums collected. 2. Last year Company $$K$$ earned a total of$150 million in profits from the investment of accumulated surplus premium from previous years.

OA E
Target question: Did Insurance Company $$K$$ have more than $300 million in total net profits last year? Jump straight to... . . . Statements 1 and 2 combined Statement 2 tells us about profits from ONE PART of Company K's business. Statement 1 tells us a tiny bit about Company K's expenses. There are several scenarios that satisfy BOTH statements. Here are two: Case a: Company K earned a total of$150 million in profits from ONE PART of its business, and another $100 Billion in profits from the OTHER PARTS of its business. In this case, the answer to the target question is YES, Company K DID have more than$300 million in total net profits last year.
Case b: Company K earned a total of $150 million in profits from ONE PART of its business, and LOST$100 Billion in the OTHER PARTS of its business. In this case, the answer to the target question is NO, Company K did NOT have more than $300 million in total net profits last year. Since we cannot answer the target question with certainty, the combined statements are NOT SUFFICIENT Answer: E Cheers, Brent A focused approach to GMAT mastery GMAT/MBA Expert GMAT Instructor Posts: 6353 Joined: 25 Apr 2015 Location: Los Angeles, CA Thanked: 43 times Followed by:25 members Re: Did Insurance Company $$K$$ have more than$300 million in

by [email protected] » Fri Jun 11, 2021 4:25 pm

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AAPL wrote:
Fri Jul 12, 2019 4:04 am
Official Guide

Did Insurance Company $$K$$ have more than $300 million in total net profits last year? 1. Last year Company $$K$$ paid out$0.95 in claims for every dollar of premiums collected.
2. Last year Company $$K$$ earned a total of $150 million in profits from the investment of accumulated surplus premium from previous years. OA E Solution: We need to determine whether Insurance Company K had more than$300 million in total net profits last year.

Statement One Alone:

Without knowing the total number of dollars of premiums Company K collected last year, we can’t determine whether Insurance Company K had more than $300 million in total net profits last year. Statement one alone is not sufficient. Statement Two Alone: This does not tell us anything about the profits earned on the premiums collected last year. Statement two alone is not sufficient. Statements One and Two Together: Even with the two statements, we still don’t know the total number of dollars of premiums Company K collected last year, and therefore, we can’t determine whether Insurance Company K had more than$300 million in total net profits last year. Both statements together are still not sufficient.