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...
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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
