# Yesterday’s closing prices of 2,420 different stocks…

## Solution:

Although this problem may seem wordy it is actually a pretty basic word problem. We are asked to determine the number of stocks that closed at a higher price today than yesterday.

Initially we are given that there are 2,420 different stocks. Another way to look at this is the TOTAL NUMBER of stocks is 2,420. We are also given that the number of stocks that closed at a higher price today than yesterday was 20% greater than the number that closed at a lower price. Let’s create two variables and then two equations using those variables. So we can say:

H = number of stocks that closed at a higher price today than yesterday

L = number of stocks that closed at a lower price today than yesterday

With these two variables we can create two equations:

1) H + L = 2,420

2) H = 1.2L

We can now substitute 1.2L, from equation 2, for H, in equation 1. So we have:

1.2L + L = 2,420

2.2L = 2,420

22L = 24,200

L = 24,200/22

L = 1,100

Since we are solving for variable H, we can plug 1,100 for L, in equation 1.

H + 1,100 = 2,420

H = 1,320

Note: Be careful of the trap in the answer choices. Notice that 1,100 was actually an answer choice. Arguably, it was put there for you to jump on after getting 1,100 for variable L. Partial answers and answers that represent variables other than the one you are being asked about are common trap GMAT answers.

Also, if you were running out of time and had to use a guessing strategy, there is an interesting pattern to look at as far as these answer choices go. The method I’ll describe can be used in many cases in which we are given a TOTAL value in a word problem. With this problem here, we are first given that the total number of stocks in question is 2,420. Well, if we take a look at our answer choices, we will find two sets of answers that, when summed, equal 2,420.

a. 484
b. 726
c. 1100
d. 1320
e. 1694

Notice that: