(GMAT 800) Conventional wisdom holds that financial markets

GMAT 800 Reading Comprehension QuestionConventional wisdom holds that financial markets are informationally efficient—that stocks are always priced and traded at the intrinsic value of their underlying assets. Thus, investors cannot expect to achieve returns consistently in excess of average returns, given information that is publicly available at the time, without taking on large economic risks akin to gambling risks. In other words, one can only obtain higher returns by purchasing riskier investments, and not through expert timing or speculative stock selection. There are three major interpretations of this efficient market hypothesis: Weak Efficient Market Hypothesis (EMH), which holds that current prices for assets, such as stocks, bonds, and property, reflect all past prices, Semi-strong EMH, which argues that prices change instantly to reflect all new public information (such as news of a take-over or a change in fiscal policy), and Strong EMH, which claims that prices adjust perpetually to reflect hidden, insider information not yet made public.

Weak EMH holds that technical analysis, the analysis of past stock performance, will not consistently produce excess returns because future price movements are only determined by...

GMAT is famous for using your own momentum against you

GMAT MomentumLike a  tae kwon do blackbelt or an icy road, the GMAT is perhaps most famous for its ability to use your own momentum against you.  Few places is this as evident as on Critical Reasoning questions, in which the most common way to answer incorrectly is to allow your subconscious mind to lead you to a slightly-out-of-scope conclusion that the psychological warriors at GMAC have already anticipated you’d conclude.  Accordingly, to perform well on Critical Reasoning questions it is, well, critical that you pay particular attention to the narrow scope of the conclusion.  As an example, consider the question:

Poor physical fitness among children has become an epidemic among American children.  In Europe, however, where schoolchildren participate in calisthenics and other athletic activities on a daily basis while at school, children are significantly more fit.  Tests show that European students have superior strength and agility, and that they are significantly more likely than are American children to maintain a healthy lifestyle throughout their lives.  Therefore, we must conclude that American children can become more...

GMAT Word Problems - Basics

GMAT Word ProblemsWord problems on the GMAT get an unfair reputation for being especially challenging. However, it’s helpful to think of them as just dressed-up algebra. The real challenge is that they are (1) long, (2) boring, and (3) require translation from ‘English’ to ‘Math.’ Here are a few questions to ask yourself to make sure you fully break down and understand the problem BEFORE you start to solve!

What is the problem really asking?

    Make sure to understand what the answer choices represent. Are they the total number of dollars of profit? The profit accumulated by Jenny only? The percent increase in profit from June to July? Taking the time to do this will also ensure you never leave a problem half finished. If you dive into setting up an equation too quickly, you may realize half-way through that you’re solving for the wrong variable. Sometimes word problems will add an extra step at the end. You may be busy solving for “x” and forget that the problem is asking for the value of “1/x”.

What information am I given?

    The best...

4 Tricks that will Keep you focused on your GMAT Reading Comprehension

GMAT RC FocussedGMAT Reading Comprehension passages are complicated and boring texts that will test your concentration and stamina. It is easy to lose your focus after an energy draining AWA and Math section. Most GMAT test takers will start to zone out at this stage and will just stare at the screen, re-reading the same sentence again and again. This is a sure shot step to crash your GMAT 700+ dream.

Follow these four preparation and test day tricks and you will learn to keep your focus for a long duration of time

Start practicing GMAT-like texts

It’s obvious that a reading comp passage won’t be as thrilling as your favorite Dan Brown novel, but the GMAT actually makes RC passages boring on purpose. The test-makers go out of their way to make the text complex, and they like to use natural science and social science topics with which potential business-school students may not be familiar. To prepare yourself, start reading real-world texts that mimic GMAT passage structures. The Economist, Scientific American, and The Wall Street Journal are good places to start, and magazines like Time and Newsweek feature editorial articles that can help you learn...

GMAT 800 with Video Explanation - A newborn kangaroo, or joey

A newborn kangaroo, or joey, is born after a short gestation period of only 39 days. At this stage, the joey’s hind limbs are not well developed, but its forelimbs are well developed, so that it can can climb from the cloaca into its mother’s pouch for further development. The recent discovery that ancient marsupial lions were also born with only their forelimbs developed supports the hypothesis that newborn marsupial lions must also have needed to climb into their mothers’ pouches.

The argument in this passage relies on which of the following assumptions?

[A] All animals that are born after a short gestation period are born with some parts of their bodies underdeveloped.
[B] Well developed forelimbs would have been more advantageous to ancient marsupial lions than well developed hind limbs would have been.
[C] If the newborn marsupial lion did not climb into its mother’s pouch, then paleontologists would be able to find evidence of this fact.
[D] Newborn marsupial lions that crawled into their mothers’ pouches could not have done so had they not had only their forelimbs developed at birth.
[E] Newborn marsupial lions would not have had only their forelimbs developed if this development were of no use to the marsupial lions.

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GMAT Sentence correction General Strategies

GMAT Sentence Correction General StrategiesGMAT Sentence correction(SC) comprises 15 of the total 41 verbal questions, which means that the majority of verbal questions are from GMAT SC. With SC questions, you will be presented with a question followed by five answer choices. The question will be underlined in part. You have to select the best answer choice that rephrases the underlined part of the question. Remember - the first answer choice will repeat the original text so don't bother to read it again.

Here is a step by step action plan to solve GMAT SC Questions

1. Read the whole sentence slowly and carefully. We all have different reading speeds, but as a good rule of thumb, you’ll want to read the sentence significantly slower than you would read a novel. For you fast readers who don’t subvocalize as you read, you might want to try subvocalizing SC sentences; sometimes it’s best to hear the mistake rather than see it.

2. If you notice what looks like an error in the underlined portion, try to identify the type of error before you move...

How to identify Style or Tone in GMAT Reading Comprehension

GMAT Reading Comprehension Tone and StyleOne question type you are bound to encounter on the GMAT Reading Comprehension is a style or tone question. Style and tone questions are particularly rare because most of the passages will be informational articles with neutral tones. For example, it would not be very challenging if you were asked to identify the tone of a passage about the many types of metamorphic rock - such a passage would surely be neutral.   

The tone of any given passage is the author’s emotion or feeling, usually towards his subject. An author’s style is the particular way he uses language to reflect his unique authorial voice. Most style or tone questions will include the words “attitude,” “tone,” “style,” “feeling,” etc. A typical question of this type might look like this:

•  The author’s attitude toward global warming might best be described as which of the following?

•  Which of the following best describes the tone of the passage?

•  Based on the statements in lines 43-46, which of the...

First Ten GMAT Questions - 9 Things to consider

Categories : GMAT Tips

Importance of First GMAT QuestionA common belief is that the first ten questions “count” the most in each section of the GMAT, and that in light of this “fact,” you should spend more time on these early questions than you do on the rest of the test. Unfortunately, this belief is false, and its implied course of action could actually be detrimental to your score. Put plainly: you might hurt your score by spending more time on the early questions that you do on later ones.

Some people continue to believe this legend, despite all the evidence to the contrary. If you still think that the first questions count more than later ones, or if you’re still not sure what you think, then read on. You need to know the facts of the matter if you’re going to succeed on the GMAT.

1. The GMAT itself states that the first ten questions don’t count more.
If you have your Official Guide handy, open it up to page 17, bottom right. There’s a text box there with the header “Myth vs Fact.” Here the test maker specifically says that it is a myth that you should invest all your time in the first ten questions, and adds, “all questions count.”


Top 10 GMAT Problem Solving Tips

Categories : GMAT Tips, Problem Solving

GMAT Problem Solving TipsThe Problem Solving (PS) section of the GMAT may not be as quirky as the Data Sufficiency section of the test – but that doesn’t mean you don’t need to study for it! PS questions require more “straight math” than Data Sufficiency questions; in other words, they’ll probably be more like the questions you’re used to seeing on high school and college math tests. The best way to study? Master the basic concepts from geometry, algebra, statistics, and arithmetic — then check out these 10 helpful tips!

1. Make sure your fundamentals are strong.

The GMAT doesn’t allow you to use a calculator—which means you need to be quick and accurate with basic calculations. Be able to multiply and divide decimals. Know common higher powers and roots. Have fractions down to a science: Knowing right away whether 3/8 is less than 5/12 will mean you have more time later to work on more complicated calculations.

2. Choose numbers wisely.

Even questions that don’t contain variables can still be tackled by choosing numbers wisely. For example, if a question asks you about “a multiple of 6,” it’s probably quicker...

How to handle nerves on GMAT test day?

Categories : GMAT Exam Day Tips

Handling Nerves on GMAT Test DayTest day is no different than any other GMAT prep days. You have to be focused, prepared and give your best shot. But we are not robots, we are humans. So it is natural to feel a little bit anxious. But if you feel: cold sweats, night terrors, the shakes, and so on, then you are showing signs of acute anxiety. Knowing what to expect in the testing center will help you relieve some of the unnecessary anxiety. Here is Knewton's minute by minute breakdown of what to expect in the test center.

1. Arrive early, but don’t plan on studying at the testing center. 30 minutes before liftoff

Show up to the test center 30 minutes before the official time, as the GMAC suggests. Although this may mean waking up even earlier than expected, avoiding any feeling of being rushed is priceless. However, many testing centers don’t allow studying in the waiting room, so don’t plan on getting there early and reviewing notes. Use the time before the test to relax and focus on the task at hand.

2. Locker Room. 10 minutes before liftoff

After presenting your identification and test reservation, you may be given...

GMAT Integrated Reasoning - Latest Updates

The Graduate Management Admissions Council is continuing its evolution of its test, the GMAT, with a big change coming in June 2012.  The increasing prevalence of computers -- and the increasing reliance on computer-generated information -- has led them to alter the test format in an important way.

What’s changing? 
One of the two essays, the Analysis of an Issue, will no longer be part of the test.  Students will complete the Analysis of an Argument essay and then begin the new Integrated Reasoning section immediately, after which is an optional break before the Quantitative section.  In all other respects, the test experience itself is the same; the order and timing of the sections that remain is identical, and the entire test is still four hours long with the optional breaks.

What’s Integrated Reasoning? 
After surveying hundreds of faculty worldwide, GMAC is introducing a new section with four question types.  These questions are meant to test the types of skills required by the world of business today:

1) Making decisions from a mixture of quantitative and verbal information
2) Reorganizing information to answer questions and discern trends

3 Crucial GMAT Sentence Correction Strategies

Categories : Sentence Correction

GMAT SC StrategiesOf all the question types on the GMAT, a global exam for which the pool of test takers includes more than half of its examinees from outside the United States, Sentence Correction may seem the most arbitrary to prospective examinees.  Math we get: nearly all MBA graduates will have to make decisions using numbers and nearly all MBA programs require coursework in areas like finance and accounting for which some baseline math skills are important.   But English grammar?  Why would schools like INSEAD and ESADE, located in countries where English is not an official language and attracting students from all corners of the globe, be concerned with English grammar subtleties?  Especially when, as about 1/3 of the verbal section, sentence correction counts for about 17% of someone’s GMAT score.  It’s probably nice to know that everyone can speak the same language, but 17% of someone’s entry value?  Isn’t that overkill?

That should be a clue to you that Sentence...

How to solve work and rates problem in GMAT

Work Rate ProblemsCarefully go through the following question types. These are the standard work rate problems that you would encounter in your GMAT Exam.

Working Together

In questions where individuals work at different speeds, we typically need to add their separate rates together. Make sure you keep your units straight. This doesn’t mean wasting time and writing each and every one out, but rather simply recognizing their existence. Note that when working together, the total time to complete the same task will be less than BOTH of the individual rates, but not necessarily in proportion. Nor, are you averaging or adding the given times taken. You must add rates.

Q) A worker can load 1 full truck in 6 hours. A second worker can load the same truck in 7 hours. If both workers load one truck simultaneously while maintaining their constant rates, approximately how long, in hours, will it take them to fill 1 truck?

A. 0.15
B. 0.31
C. 2.47
D. 3.23
E. 3.25

The rate of worker #1 is 1 truck/6 hours. This can also be 1/6 trucks/1 hour. The rate of worker #2 is 1/7. When together, they will complete 1/6 + 1/...

What is the greatest prime factor of 12!11! + 11!10!?

Categories : Number Properties

What is the greatest prime factor of 12!11! + 11!10!?

(A) 7
(B) 11
(C) 13
(D) 17
(E) 19


While it is common for students to simply look at the numbers 12!, 11!, and 10! and see that the highest naturally-occurring prime number is 11, it is  important to know that this is an addition problem – the numbers 12!11! and 11!10! are combined to create a new number that may well have a higher prime factor than its factorial components.

When adding large numbers like factorials and exponents, it is  often quite helpful to factor out common terms. In this case, it’s particularly important, because our entire goal is to break out the large sum into prime factors so that we can determine which is biggest. Each term has a common 11!, so by factoring that out we can get from:

12!11! + 11!10!
11! (12! + 10!)

Now, 12! includes a 10! – it’s essentially 12 * 11 * 10!, so we have a common 10! within the parentheses that can also be factored out, going from:

11! (12*11*10! + 10!)
11!10! (12*11 + 1)

At this point, the largest prime factor must be either the 11 outside the...

How to identify modifying Phrases In GMAT Sentence Correction

Modifying PhraseA common trick used by GMAT test makers is to insert modifying phrase incorrectly. Here are some sentences that incorrectly use modifying phrases:

Sentence A: Ever since her paw was crushed in the front door, Mrs. Benson has been worried about Muffin, her pet cat.

Sentence A starts off with the modifying phrase “Ever since her paw was crushed in the front door,” and then talks about Mrs. Benson and her worry for her cat.  But Mrs. Benson sounds like a person, and as a person, she probably doesn’t have a paw to be crushed.  It’s MUCH more likely that Muffin’s paw got crushed, causing Mrs. Benson’s worry.  This sentence needs to be corrected to put the modifying phrase next to the item it modifies. 

Here are a couple of ways that we can do that, depending on where the sentence’s underlining is placed:

Sentence A1: Ever since her paw was crushed in the front door, Mrs. Benson has been worried about Muffin, her pet cat.

If the modifying phrase isn’t underlined, we don’t have the opportunity to fix it-- but we can rearrange the rest of the sentence so that the thing that is modified (...

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