GMAT Quant: Question of the Day!

Try Picking Numbers with the GMAT practice problem of the day!

Last year the price per share of Stock X increased by k percent and the earnings per share of Stock X increased by m percent, where k is greater than m. By what percent did the ratio of price per share to earnings per share increase, in terms of k and m?

A. k/m
B. (k – m)
C. [100 (k – m)]/ (100 + k)
D. [100 (k – m)]/(100 + m)
E. [100 (k – m)]/ (100 + k + m)


If the original price per share of Stock X = 100
Let’s say k = 20
New price per share = 120

Original earnings per share of Stock X = 100
Let’s say m = 5 (since k > m)
New earnings per share = 105

Old ratio of price/earnings = 100/100 = 1
New ratio of price/earnings = 120/105 = approx 1.14

The percent increase is approx 14%.

Plug in our numbers into the answer choices, and look for the choice that also yields 14%:

A. k/m = 20/5 = 4 too small

B. (k – m) = 20 – 5 = 15 too big

C. 100 (15) / 100 + 20 = 1500 / 120 = 12.5 too small

D. 100 (15) / 100 + 5 = 1500/105 = approx 14. CORRECT!

E. 100 (15) / 100 + 20 + 5 = 1500/125 = 12

The answer is (D).

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Interpreting Evidence Correctly on the ACT and SAT

In all three types of ACT Science passages, you will need to be able to understand how evidence is presented and be asked to answer questions based on the evidence. These are a bit like Reading questions.

To interpret evidence correctly, you need to focus on the results. Draw logical conclusions based on the presented data, and actively read the information in the accompanying passage. It’s important to know the difference between direct and inverse variation.

To answer Interpreting Evidence questions correctly, ask yourself these 3 questions: – What is the evidence presented? – Whose position is supported by the evidence? – What does the evidence suggest?

Interpreting evidence for Data Representation and Research Summaries ends up requiring more Data Analysis skills, since data is a large component of those passages. For Conflicting Viewpoints, interpreting evidence is a matter of keeping the two theories (two scientists) straight. Watch this video for a strategy on how to do this!

This video describes how to answer “Inference” questions on the SAT and ACT Reading Test. You may wonder what this has to do with ACT Science, but sometimes interpreting evidence is a LOT less scientific than it sounds, and a LOT more like reading comprehension. Remember that you can only make an inference BASED on something directly stated. Incorrect answer choices are frequently “out of scope.”

 

Learnist Board of the Week: Destroy GMAT Reading Comp (once and for all)

Check out this new Learnboard with a step by step guide to conquering RC once and for all!

Step 1 — To start, here’s the mandatory books you’ll need to get:

  • GMAT Official Guide – 13th edition
  • GMAT Official Guide – Verbal review, 2nd edition

You’ll want to know the RC questions in this book backwards, forwards, and upside down.

Other books with lots of passages to practice:

  • Veritas Prep – Reading Comprehension Guide
  • Manhattan GMAT – RC Strategy Guide
  • Artistotle Prep – RC Grail

Step 2 — Read The Economist, or other high-quality publications!

The Economist is a weekly newspaper focusing on international politics and business news. Not only is its subject-matter right up GMAT’s alley, but its written in a more advanced vernacular than your average newspaper — a level matched by the GMAT RC.

As you read these articles, do the following:

  • Circle the topic
  • Underline any transition words
  • Write down the purpose of each paragraph
  • Write down the author’s point of view in your own words
  • Write down the Main Idea in your own words

Do all of this to build your RC skills — ALWAYS read with a pen in your hand, and always ask the million dollar question, “Why is the author saying this?”

Fun fact: You can use your Delta Skymiles for a free subscription. 3,200 miles gives you 51 issues!

For Steps 3 through 7, check out How to Destory GMAT Reading Comp (once and for all)!

 

Argument Essay sample + feedback

Looking for a sample Argument Essay with some expert feedback? Here’s a real essay from a fellow GMAT-student!

PROMPT:

The following paragraph recently appeared in an editorial printed in the opinion section of a local newspaper:

The recent surge in violence in the southern part of the city is a result of a shortage of police officers and an absence of leadership on the part of the city council. In order to rectify the burgeoning growth of crime that threatens the community, the city council must address this issue seriously. Instead of spending time on peripheral issues such as education quality, community vitality, and job opportunity, the city council must realize that the crime issue is serious and double the police force, even if this action requires budget cuts from other city programs.

With the allotted time remaining, discuss how well reasoned you find this argument.

ESSAY:

The argument claims that the recent surge in violence in the southern part of the city is a result of a shortage of police officers and an absence of leadership on the part of the city council and hence the city council must react seriously to the situation by doubling the police force even if doing so requires budget cuts from other city programs. The conclusion of the argument relies on assumptions for which there is no clear evidence. Hence the argument is weak or unconvincing and has several flaws.

First and most importantly, the argument readily assumes that the recent surge in violence in the southern part of the city is a result of a shortage of police officers. This statement is a stretch in a sense that it fails to establish that the shortage of police officers is the only reason for the recent surge in violence. Other factors such as poor economy, a lack of job opportunity and a declined in education quality can also result in a surge in violence. Take the US for example, its rate of violence crimes increases with that of the unemployment which is currently at 9.8%. Without establishing the root cause of the situation carefully, the argument may lead to corrective actions which will not produce the desired outcome.

Second the argument claims that the city council does not realize the seriousness of the recent surge in violence and therefore is not addressing the surge in violence seriously. This is again very weak and fails to prove that the city council is not addressing the surge in violence seriously enough. It could be a case whereby the city council is still working on the issue but there have been no concrete actions yet.

Finally, the argument claims that the city council should double the police force at the expenses of other issues such as education quality, community vitality and job opportunity to curb the recent surge in violence. This again is a far-fetch conclusion in that it did not explain how doubling the police force can help in curbing the recent surge in violence even if it true that indeed a shortage of police force is the cause of the surge in violence.

In summary, the argument is flawed and therefore unconvincing. It could be considerably strengthen if the author clearing mentioned all the relevant facts. In order to ascertain the root cause and subsequently the solution to a situation, it is essential to have full knowledge of all contributing factors and weigh them appropriately before arriving at the conclusion.

FEEDBACK:

This essay is absolutely on the right track. It has clear, forceful writing & a good grasp of the task at hand! Here’s the bullet-points where it could be fine-tuned:

– Style-wise, “hence” is used twice in the opening paragraph; it’s hard to come up with good transition words, but varying up your diction can be impressive to the reader

– For this thesis, the reader is going to look straight at the last sentence of the opening paragraph: “Hence the argument is weak or unconvincing and has several flaws.”

Look for a way to combine this with the previous sentence to make it strong and more stand-alone. The word “or” weakens this thesis – why not use “and”? Always aim for the strongest language possible when criticizing the argument.

-1st paragraph – the phrases “in a sense” and “may lead” are a bit wishy-washy; excellent logic is displayed here and the link between crime and unemployment is strong. It could be improved by a more specific example, such as a case where someone unemployed committed a crime.

-2nd paragraph – There’s not enough of a reason why the city council doesn’t realize. As in the first body paragraph, can it be related  to the real world? How do city councils function? How could they be unaware?

– 3rd paragraph – “far-fetched” should be written instead of “far-fetch”  – What would be even more powerful here would be to discuss how lack of quality education, community vitality and job opportunity can lead to an increase in violence that would overwhelm even a doubled police force

– Conclusion – It’s excellent, with a nice adding in of how it could be strengthened!

Make sure to leave 1-2 min. at the end to proofread your Argument essay – A couple grammatical errors are not massively important, but they do detract from the overall reader impression, so practice writing several essays until you can effectively manage your time!

3 Ways of Looking at “Profit” Questions on the GMAT

As someone who is about to shell out hundreds of dollars in MBA application fees, you know that money makes the GMAT-world go round. Profit is an essential concept for any aspiring MBA admissions applicant. The GMAT tests this concept in both Problem Solving and Data Sufficiency questions in three main ways. Let’s examine the need-to-know formulas with three GMAT practice questions.

1. A firm increases its revenues by 10% between 2008 and 2009. The firm’s costs increase by 8% during this same time. What is the firm’s percent increase in profits over this period, if profits are defined as revenues minus costs?

(1) The firm’s initial profit is $200,000.

(2) The firm’s initial revenues are 1.5 times its initial costs.

In this question from Grockit, we can start with our most basic Profit formula:

Profit = Revenue – Cost

Using Statement (1), we can say that 200,000 = R – C.
(1.1)r – (1.08)c = 200,000(1 + x), where x equals the amount of the increase. We still do not know R and C so we can’t find x. Insufficient.

Using Statement (2), 1.5c – c = p and (1.1)(1.5)c – (1.08)c = (1 + x)P. Here we can simplify.

.5c = p

.57c = (1 + x)p
Without continuing to solve, we can see that we can solve for x using substitution. .57c = (1 + x)(.5c), and dividing both sides by c will cancel out that variable and allow us to isolate x. Statement 2 is sufficient. Now to a more challenging question!

2. A store purchased 20 coats that each cost an equal amount and then sold each of the 20 coats at an equal price. What was the stores gross profit on the 20 coats?

(1) If the selling price per coat had been twice as much, the store’s gross profit on the 20 coats would have been $2400.

(2) If the selling price per coat had been $2 more, the store’s gross profit on the 20 coats would have been $440.

This GMAT Prep question asks about gross profit.

Gross Profit = Selling price – Cost

For the value Data Sufficiency question, we need to know the price of each coat and the selling price of each coat. From the given information, we can use our known formula to set us the equation: P = 20 (s – c). So either we’ll need a value for s and a value for c, or we’ll need the value of (s – c).

Statement (1) tells us that $2400 = (20(2s – c)) or 2400 = 40s – 20c. We can divide both sides by 20 and simplify it to: 120 = 2s – c. We still don’t know s and c. Insufficient.

Statement (2) tells us that 440 = 20(s + 2 – c). Let’s simplify: 440 = 20s + 40 – 20c. 400 = 20s – 20c. 400 = 20 (s – c). 20 = s – c. Sufficient. Even though we didn’t solve for s and c separately, we were able to find the value of (s – c). Sometimes DS will surprise you!

3. If the cost price of 20 articles is equal to the selling price of 25 articles, what is the % profit or loss made by the merchant?

A. 25% loss
B. 25% profit
C. 20% loss
D. 20% profit
E. 5% profit

Profit/Loss % = (Sales Price – Cost Price) / Cost Price x 100

The question asks about % profit or loss. It tells us that 20c = 25s, or 4c = 5s. So the ratio of the sales price to the cost price is 4/5.

Let’s simplify our Profit/Loss % formula by dividing each term by the cost price:

Profit/Loss % = (S/C – C/C) x 100

P/L% = (S/C – 1) x 100
We know that S/C = 4/5 for this problem. So we can plug in and solve:

P/L% = (4/5 – 1) x 100

P/L% = (-1/5) x 100

P/L% = -20%. The answer is a 20% loss.

Grammar Guide: the usage of “those”

Confused about how “those” works on the SAT, ACT, GRE, or GMAT? Let’s take a look at a question from Manhattan GMAT that uses this word!

Salt deposits and moisture threaten to destroy the Mohenjo-Daro excavation in Pakistan, the site of an ancient civilization that flourished at the same time as the civilizations in the Nile delta and the river valleys of Tigris and Euphrates.

A) that flourished at the same time as the civilizations
B) that had flourished at the same time as had the civilizations
C) that flourished at the same time those had
D) flourishing at the same time as those did
E) flourishing at the same time as those were

In general, “those” is the plural of “that.” It’s in a group called “determiners” along with “this”, “that”, “these”, “those,” “here” and there that are technically pronouns but often function more like adjectives.

For C, D, and E, “those” is meant to mean something like “the ones” and could be used as a pronoun to replace a plural antecedent if there was one in the sentence, and if the construction was parallel.

The correct answer is (A).

Spotting Consistent Ideas in GRE Sentence Equivalence

Sentence Equivalence is one of the newer GRE Verbal question types (replacing the older Sentence Completions). Like Sentence Completions, Sentence Equivalence consists of one sentence with one blank. Unlike Sentence Completions, there are two correct answers and not one, and you must get both to get the question correct.

To solve Sentence Equivalence, you’ll need to know 1) the relationship of the blank to the rest of the sentence, and 2) the meaning of the entire sentence. There are approximately 8 total Sentence Equivalence questions on the GRE, 4 on each Verbal section. These questions should take approximately 1 minute each.

Consistent Ideas is one of the four types of Sentence Equivalence questions. In Consistent Ideas questions, the blank will mirror or extent the logic of the rest of the sentence. Like it sounds, the blank will continue the ideas of the rest of the sentence. You’ll be able to recognize this type because of certain constructions.

Here are common “Consistent Ideas” key words and phrases to look out for: for this reason, again, to reiterate, along with, in addition, for example, to illustrate, thus, likewise, similarly, since, also, and, next, as well as, as a result, to sum up, concluding, additionally, etc.

Let’s look at an example Sentence Equivalence question:

1. As a teacher of creative writing, Mercedes demanded her students’ best work; likewise, her own fiction was often subjected to ———– analysis by those same students.

A. scrupulous
B. equitable
C. reverent
D. spiteful
E. malicious
F. rigorous

We know this is a Sentence Equivalence Consistent Ideas question because of the keyword “likewise.” The semicolon tells us the second half of the sentence will mirror the logic of the first half. The key phrase is “demanded” which explains the relationship. We can predict something like “demanding” for the blank. We need a word that is neither positive nor negative, but shows a strong, exacting demand.