Dedicated Data Interpretation Session 1 – Dollar Amount with 3-decimal Places (Price-per-share)

GRE Quant Problem Solving
1

In this session, we are asked to solve the following question:

“If $4,500 was invested in a bond fund when the price per share was $9 and $3,000 was invested in the fund when the price per share was $10, what was the average (arithmetic mean) price per share purchase?”

(A) $9.625
(B) $9.50
(C) $9.40
(D) $9.375
(E) $9.20

I got the correct answer, which was (D) $9.375. However, the 3-decimal places really threw me off… On the real GRE, I either would’ve wasted time questioning myself or incorrectly guessed (C) $9.40 because that is a dollar amount to 2-decimal places.

In finance, price per share can have 3 decimal places, but immediately I thought this was another “GRE Trick” because typically dollar amounts cannot have 3-decimal places. Nothing in the question stated that 3-decimal places in PPS was valid, so without having a knowledge of stock pricing, it seems pretty unclear on how to differentiate between a “trap answer” and the valid one.

Any suggestions on how to not overthink what a GRE “trick” may or may not be? Or how to consider similar questions that might be a bit opaque?

2

Treat each question on its own merits. The ETS Math Conventions (https://www.ets.org/pdfs/gre/gre-math-conventions-18-point.pdf) says that

Numbers given in a question are to be used as exact numbers, even though in some real-life settings they are likely to have been rounded.

After all, GRE questions are artificially written, and cannot test any country-specific knowledge (especially when it depends by country, as in here). Some countries do display prices with three decimal places after all.

Put it this way: till about 2001, share prices in the US were written in base 16 (i.e, share prices would be $1/16, $2/16, $3/16 etc). Does that mean that a GRE question about shares before 2002 must be in base-16 form? No.

4

Your closing analogy directly contradicts the rest of what you said, and the question itself, considering the question was resigned to the fact that share prices are written that way today.

5

I might have misunderstood you, but I don’t see why. Notice that the setting was before 2002.