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GMAT PREP RATIO

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GMAT PREP RATIO

by john1234 » Tue Jul 15, 2008 1:46 am
Over certain period did the number of shares of stock in Ruth's portfolio increase?

1) Over the time period,the ratio of the number of shares of stock to the total number of shares of stocks and bonds in Ruth's portfolio increased

2) Over the time period,the total number of shares of stcks and bonds in Ruth's portfolio increased.

Any help on this
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by saeed » Tue Jul 15, 2008 3:05 am
Here I have forced to guess.I will go for A.
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by sethids » Tue Jul 15, 2008 3:28 am
I believe the answer is E. Both the statements are insufficient.

The question stem does not contain any information other than the question: whether the number of shares of stock in Ruth's portfolio increase?

From statement 1 we know that the ratio of the number of shares of stock to the total number of shares of stocks and bonds in Ruth's portfolio increased. This increase in the ratio does not necessarily mean an increase in the number of stocks. It could be due to a decrease in the number of bonds.

Similarly from statement 2, the total number of shares of stocks and bonds in Ruth's portfolio increased. This increase is again possible due to an increase in the number of bonds alone.
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by Canman » Tue Jul 15, 2008 4:55 am
My guess is C.

1) tells us S/(S+B) increased.

2) tells us (S+B) increased.

Therefore both statements together tell us S must have also increased. If the denominator increased, the numerator must have also increased by more than the denominator for statement 1) to be true. Any thoughts?
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by raunekk » Tue Jul 15, 2008 5:22 am
IMO:C

OA??
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by mim3 » Tue Jul 15, 2008 7:27 am
It's C.

1. The ratio of stocks to bonds increased. This could be the result of an increase in stocks in the portfolio or a decrease in bonds. Insufficient.

2. Total number of stocks and bonds increase. We don't know that the number of stocks increased. It's possible that just the bonds increased, thus increasing the total number of stocks and bonds. Insufficient.

1&2: From one, the ratio or stocks increased and from 2 the total number of stocks and bonds increased. The only way for both of these to be true is if the number of stocks increased. Sufficent.
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by john1234 » Tue Jul 15, 2008 1:47 pm
I saw this question when i was reviewing all GMATPREP questions in this forum from the inception. I have not come across this particular question during my preparation on GMATPREP.I posted it so that others can learn one thing or the other.

Having said that, I dont agree with E as the answer.
Stuart and Ian, please help on this.

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by Sunny22uk » Tue Jul 15, 2008 7:49 pm
The answer should be E, I have the same explanation as sethids's.
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by beeparoo » Thu Jul 17, 2008 8:22 am
sethids wrote:I believe the answer is E. Both the statements are insufficient.

The question stem does not contain any information other than the question: whether the number of shares of stock in Ruth's portfolio increase?

From statement 1 we know that the ratio of the number of shares of stock to the total number of shares of stocks and bonds in Ruth's portfolio increased. This increase in the ratio does not necessarily mean an increase in the number of stocks. It could be due to a decrease in the number of bonds.

Similarly from statement 2, the total number of shares of stocks and bonds in Ruth's portfolio increased. This increase is again possible due to an increase in the number of bonds alone.
NO - that last sentence is illogical. You cannot increase the ratio of S/(S + B) due to an increase of B alone. You must reduce B in order to increase the ratio.

If the denominator of S/(S + B) increases, then the ratio will increase as long as numerator also increases. Hence, S has increased.

Choose C.
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by moliver » Thu Jul 17, 2008 12:44 pm
Agree with beeparoo
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Re: GMAT PREP RATIO

by parallel_chase » Thu Jul 17, 2008 2:19 pm
john1234 wrote:Over certain period did the number of shares of stock in Ruth's portfolio increase?

1) Over the time period,the ratio of the number of shares of stock to the total number of shares of stocks and bonds in Ruth's portfolio increased

2) Over the time period,the total number of shares of stcks and bonds in Ruth's portfolio increased.

Any help on this
I think the answer is C.

It is easier for me to work with values.

Original value

Shares = 10
Bonds = 20
Ratio of shares to Total of shares + bonds = 10/30 = 1/3

Statement I

Ratio of shares to shares and bonds has increased
Ratio can be increased in two ways.

20/50 = 2/5

or

10/20 = 1/2

Therefore not sufficient.

Statement II

Total number of shares + bonds has increased.

It could simply mean just bonds have increased.

Therefore not sufficient.

Statement I & II

Ratio has increased + total of shares & bonds have increased

If we only the number of bonds

10/(10+40) = 1/5 it means ratio has actually decreased.

if the number of shares increase

20/(20+30) =2/5

Therefore shares have to be increased to increase the ratio.

I think I am missing something or is it because of time 3:30 in the morning.

Pls correct me if you think there is something wrong with my reasoning.

Thanks.
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