• NEW! FREE Beat The GMAT Quizzes
Hundreds of Questions Highly Detailed Reporting Expert Explanations
• 7 CATs FREE!
If you earn 100 Forum Points

Engage in the Beat The GMAT forums to earn
100 points for $49 worth of Veritas practice GMATs FREE VERITAS PRACTICE GMAT EXAMS Earn 10 Points Per Post Earn 10 Points Per Thanks Earn 10 Points Per Upvote ## John bought 2 shares and sold them for$96 each...

tagged by: BTGmoderatorLU

## John bought 2 shares and sold them for $96 each... 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.

### GMAT/MBA Expert

Legendary Member
Joined
14 Jan 2015
Posted:
2667 messages
Followed by:
122 members
1153
GMAT Score:
770
LUANDATO 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. 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 = 96 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 _________________ Veritas Prep | GMAT Instructor Veritas Prep Reviews Save$100 off any live Veritas Prep GMAT Course

Enroll in a Veritas Prep GMAT class completely for FREE. Wondering if a GMAT course is right for you? Attend the first class session of an actual GMAT course, either in-person or live online, and see for yourself why so many students choose to work with Veritas Prep. Find a class now!

### GMAT/MBA Expert

Legendary Member
Joined
14 Jan 2015
Posted:
2667 messages
Followed by:
122 members
1153
GMAT Score:
770
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.

_________________
Veritas Prep | GMAT Instructor

Veritas Prep Reviews
Save $100 off any live Veritas Prep GMAT Course Enroll in a Veritas Prep GMAT class completely for FREE. Wondering if a GMAT course is right for you? Attend the first class session of an actual GMAT course, either in-person or live online, and see for yourself why so many students choose to work with Veritas Prep. Find a class now! • Magoosh Study with Magoosh GMAT prep Available with Beat the GMAT members only code • Free Trial & Practice Exam BEAT THE GMAT EXCLUSIVE Available with Beat the GMAT members only code • Get 300+ Practice Questions 25 Video lessons and 6 Webinars for FREE Available with Beat the GMAT members only code • FREE GMAT Exam Know how you'd score today for$0

Available with Beat the GMAT members only code

• 5-Day Free Trial
5-day free, full-access trial TTP Quant

Available with Beat the GMAT members only code

• Free Veritas GMAT Class
Experience Lesson 1 Live Free

Available with Beat the GMAT members only code

• 1 Hour Free
BEAT THE GMAT EXCLUSIVE

Available with Beat the GMAT members only code

• Award-winning private GMAT tutoring
Register now and save up to \$200

Available with Beat the GMAT members only code

• Free Practice Test & Review
How would you score if you took the GMAT

Available with Beat the GMAT members only code

• 5 Day FREE Trial
Study Smarter, Not Harder

Available with Beat the GMAT members only code

### Top First Responders*

1 Ian Stewart 57 first replies
2 Brent@GMATPrepNow 31 first replies
3 Jay@ManhattanReview 29 first replies
4 GMATGuruNY 20 first replies
5 ceilidh.erickson 15 first replies
* Only counts replies to topics started in last 30 days
See More Top Beat The GMAT Members

### Most Active Experts

1 Scott@TargetTestPrep

Target Test Prep

211 posts
2 Max@Math Revolution

Math Revolution

88 posts
3 Brent@GMATPrepNow

GMAT Prep Now Teacher

70 posts
4 Ian Stewart

GMATiX Teacher

65 posts
5 GMATGuruNY

The Princeton Review Teacher

39 posts
See More Top Beat The GMAT Experts