[email protected] wrote:A telecommunications company's stock fell 10% last month, while a rival company's stock increased by 10%. The rival company's stock value today is what percentage of the telecommunication company's stock value at the beginning of last month?
(1) The rival company's stock was valued at $42 per share at the beginning of last month.
(2) The dollar amount of the rival company's stock increase was 90% as much as the dollar amount of the decrease in the telecommunication company's stock.
If we let the stock value of the rival company at the beginning of last month = x, and the stock value of the telecommunications company at the beginning of last month = y, then we can represent the current value of the rival company's stock as 1.1x (i.e., with an increase of 0.1x in value) and the current value of the telecommunications company's stock as 0.9y (with a decrease of 0.1y in value).
We need to determine what percentage the rival company's stock value today is of the telecommunications company's stock value at the beginning of last month. That is:
(1.1x)/y = ?
Statement One Alone:
The rival company's stock was valued at $42 per share at the beginning of last month.
We know that x = 42; however, without knowing any information regarding the other company, we cannot answer the question. Statement one alone is not sufficient.
Statement Two Alone:
The dollar amount of the rival company's stock increase was 90% as much as the dollar amount of the decrease in the telecommunication company's stock.
Using the information in statement two, we can create the following equation:
0.1x = 0.9(0.1y)
x = 0.9y
x/y = 0.9
Since we have a value for x/y, statement two alone is sufficient.
Answer:
B
Jeffrey Miller
Head of GMAT Instruction
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