{"id":40069,"date":"2025-06-27T13:09:25","date_gmt":"2025-06-27T13:09:25","guid":{"rendered":"https:\/\/gaviki.com\/blog\/?p=40069"},"modified":"2025-06-27T13:09:26","modified_gmt":"2025-06-27T13:09:26","slug":"a-man-who-has-some-money-buys-a-goat-for","status":"publish","type":"post","link":"https:\/\/gaviki.com\/blog\/a-man-who-has-some-money-buys-a-goat-for\/","title":{"rendered":"A man who has some money buys a goat for"},"content":{"rendered":"\n<p>A man who has some money buys a goat for<\/p>\n\n\n\n<ol start=\"70\" class=\"wp-block-list\">\n<li>Then he buys it back for<\/li>\n\n\n\n<li>A) How much did he make, and provide your reasoning? B) Which would have been the optimum trading strategy if he had known the movements of the goat&#8217;s market price beforehand, and how much money would he have made using this strategy?<\/li>\n<\/ol>\n\n\n\n<p><strong><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-cyan-blue-color\">The Correct Answer and Explanation is:<\/mark><\/strong><\/p>\n\n\n\n<p><strong>Correct Answer:<\/strong><\/p>\n\n\n\n<p><strong>A)<\/strong> The man made <strong>20<\/strong> in profit.<br><strong>B)<\/strong> The optimum trading strategy would have been to only sell the goat for <strong>90<\/strong> without buying it back, making a total profit of <strong>90<\/strong>.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Detailed Reasoning and Explanation:<\/strong><\/h3>\n\n\n\n<p><strong>Part A: How much did he make?<\/strong><\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li>Initially, the man buys the goat for <strong>70<\/strong>. This means he spends <strong>70<\/strong>, so his cash decreases by <strong>70<\/strong>, but he owns a goat.<\/li>\n\n\n\n<li>He later sells the goat for <strong>90<\/strong>, meaning he gets <strong>90<\/strong> in cash and no longer has the goat.<\/li>\n<\/ol>\n\n\n\n<p><strong>Profit Calculation:<\/strong><br>Total money received from selling the goat = <strong>90<\/strong><br>Total money spent on buying the goat = <strong>70<\/strong><br><strong>Profit = 90 &#8211; 70 = 20<\/strong><\/p>\n\n\n\n<p>So, the man made a <strong>20<\/strong> profit after this series of transactions.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><strong>Part B: Optimum Trading Strategy with Foreknowledge<\/strong><\/p>\n\n\n\n<p>If the man had perfect knowledge of the goat&#8217;s market price movement, the most profitable strategy would have been different. Here&#8217;s how:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>If he knew beforehand that the goat&#8217;s price would rise to <strong>90<\/strong>, the best option would have been to <strong>avoid buying the goat at 70 altogether<\/strong>, and instead <strong>sell a goat directly at 90<\/strong>, assuming access to a goat or the ability to engage in the sale.<\/li>\n<\/ul>\n\n\n\n<p>Alternatively, considering only the given scenario where the first transaction is necessary:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Buy the goat at <strong>70<\/strong><\/li>\n\n\n\n<li>Sell it at the highest price possible, which is <strong>90<\/strong><\/li>\n\n\n\n<li>Do <strong>not buy it back again<\/strong>, avoiding unnecessary future risk.<\/li>\n<\/ul>\n\n\n\n<p><strong>Maximum Profit:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Sell at <strong>90<\/strong> without buying the goat back again<\/li>\n\n\n\n<li>Total profit = <strong>90<\/strong>, assuming no ownership cost or risk.<\/li>\n<\/ul>\n\n\n\n<p>But based strictly on the transactions mentioned:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>He bought for <strong>70<\/strong>, sold for <strong>90<\/strong>, made <strong>20<\/strong> profit.<\/li>\n<\/ul>\n\n\n\n<p>Therefore, with foresight, <strong>maximum theoretical profit is 90<\/strong>, but in this realistic case, he made <strong>20<\/strong>. The key to better trading would have been minimizing transactions and capitalizing at peak price.<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"852\" height=\"1024\" src=\"https:\/\/gaviki.com\/blog\/wp-content\/uploads\/2025\/06\/learnexams-banner8-1217.jpeg\" alt=\"\" class=\"wp-image-40079\" srcset=\"https:\/\/gaviki.com\/blog\/wp-content\/uploads\/2025\/06\/learnexams-banner8-1217.jpeg 852w, https:\/\/gaviki.com\/blog\/wp-content\/uploads\/2025\/06\/learnexams-banner8-1217-250x300.jpeg 250w, https:\/\/gaviki.com\/blog\/wp-content\/uploads\/2025\/06\/learnexams-banner8-1217-768x923.jpeg 768w\" sizes=\"auto, (max-width: 852px) 100vw, 852px\" \/><\/figure>\n","protected":false},"excerpt":{"rendered":"<p>A man who has some money buys a goat for The Correct Answer and Explanation is: Correct Answer: A) The man made 20 in profit.B) The optimum trading strategy would have been to only sell the goat for 90 without buying it back, making a total profit of 90. Detailed Reasoning and Explanation: Part A: [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-40069","post","type-post","status-publish","format-standard","hentry","category-quiz-questions"],"_links":{"self":[{"href":"https:\/\/gaviki.com\/blog\/wp-json\/wp\/v2\/posts\/40069","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/gaviki.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/gaviki.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/gaviki.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/gaviki.com\/blog\/wp-json\/wp\/v2\/comments?post=40069"}],"version-history":[{"count":1,"href":"https:\/\/gaviki.com\/blog\/wp-json\/wp\/v2\/posts\/40069\/revisions"}],"predecessor-version":[{"id":40080,"href":"https:\/\/gaviki.com\/blog\/wp-json\/wp\/v2\/posts\/40069\/revisions\/40080"}],"wp:attachment":[{"href":"https:\/\/gaviki.com\/blog\/wp-json\/wp\/v2\/media?parent=40069"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/gaviki.com\/blog\/wp-json\/wp\/v2\/categories?post=40069"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/gaviki.com\/blog\/wp-json\/wp\/v2\/tags?post=40069"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}