lheiannie07 wrote:Michael's broker sends Michael a margin call if the equity balance in his account falls below $25,000 at the close of any trading day during a 30 day time period. Did the broker send Michael a margin call sometime in the last 30 days?
(1) Michael's trading account balanced declined by $250,000 during the 30 day period.
(2) At the beginning of the month, Michael's trading account balance was $125,000.
Is there any sufficient statement?
OA E
Given: Michael's broker sends Michael a margin call if the equity balance in his at the close of any trading day during a 30 day time period
We have to determine whether the broker gave a margin call.
Let's take each statement one by one.
(1) Michael's trading account balanced declined by $250,000 during the 30 day period.
Case 1: Say on a given day Michael's account showed $260,000 and it declined by $250,000, thus, the account balance is $10,000 (below $25,0000). The answer is Yes.
Case 2: Say on a given day Michael's account showed $300,000 and it declined by $250,000, thus, the account balance is $50,000 (not below $25,0000). The answer is No.
No unique answer. Insufficient.
(2) At the beginning of the month, Michael's trading account balance was $125,000.
We cannot conclude anything. The account may or may not fall below $25,000. Insufficient.
(1) and (2) together
Even combing the two statements will not help as Michael's account may or may not fall below $25,000. Insufficient.
The correct answer:
E
Hope this helps!
-Jay
_________________
Manhattan Review GMAT Prep
Locations:
New York |
Vienna |
Kuala Lumpur |
Sydney | and many more...
Schedule your free consultation with an experienced GMAT Prep Advisor!
Click here.
