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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 ## Leslie and Kerri ##### This topic has expert replies Junior | Next Rank: 30 Posts Posts: 11 Joined: 16 May 2009 ### Leslie and Kerri by bharatv » Wed May 27, 2009 4:01 am Over the last two years, who made more money investing in stock market, leslie or kerri? (1) Leslie made an average return of 20% and Kerri made an average return of 5%. (2) Kerri started with two times as much money as Leslie. Can someone explain the steps? OA - E Legendary Member Posts: 1169 Joined: 06 Jul 2008 Thanked: 25 times Followed by:1 members by aj5105 » Wed May 27, 2009 4:24 am I am getting the answer as [spoiler](C)[/spoiler] Master | Next Rank: 500 Posts Posts: 111 Joined: 27 Sep 2008 Thanked: 1 times by tdadic84 » Wed May 27, 2009 6:32 am im also getting C...can someone explain please.. GMAT Instructor Posts: 99 Joined: 05 Mar 2009 Location: NYC Thanked: 43 times Followed by:9 members GMAT Score:800 by Jose Ferreira » Wed May 27, 2009 7:09 am One of the most important tips I can offer on Data Sufficiency is to pay attention when the GMAT gives you a bit of information without calling much attention to it. In this case, I am honing in on the fact that statement 1 talks about the "average" returns each person received. To establish a lack of sufficiency, because the answer is E, we need to create a situation in which Leslie makes more and a situation in which Kerri makes more. Scenario 1 - Leslie makes more Leslie starts with$100 and makes 20% both years.
100(1.2)(1.2) = 144
Kerri starts with $200 and makes %5 both years. 200(1.05)(1.05) = 220.50 If we can come up with a scenario in which Leslie makes less that$20.50, then the answer must be E.

Scenario 2 - Kerri makes more
Leslie starts with $100. She loses 50% the first year and gains 90% the second year. We can do this, because the average of (-50) and (90) is 20. 100(.5)(1.9)= 95 In this scenario, she did average +20% returns, but she actually lost$5 over the two years.

Jose Ferreira
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https://www.knewton.com/gmat

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by aj5105 » Wed May 27, 2009 10:42 am
Jose,

I assumed values for L and K (K double than L). I calculated 20% for L and 5% for K. I doubled the values to get the amount for 2 years. For all values of L and K, I got L gaining more than K.

Sticking to the approach I have followed, how can I get (E) as the answer?

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