The first problem is from a 1984 IQ Test. Ready?
Riddle: The man buys the horse for $60, sells it for $70, buys the horse back for $80, and sells it again for $90. How much money did he make or lose?
A seemingly simple but confusing riddle for the reader, is the man making a loss or a profit?
If a man buys a horse for $60, sells it for $70, buys it back for $80, and sells it again for $90, the trick is to approach each transaction as separate:
-60 + 70 = 10
-80 + 90 = 10The man made $10 with each transaction, therefore his profit adds up to $20.
This story highlights the man’s ability to identify and capitalize on opportunities for small but consistent profits through buying and selling the same item multiple times. It demonstrates a certain level of business savvy and an understanding of market fluctuations, even though the overall profit margin is relatively modest.
The key takeaway is that the man was able to generate a net gain of $20 by leveraging small price differences and quickly turning over the asset, rather than trying to make a large profit on a single transaction. This approach of compounding small gains can be an effective strategy in certain business contexts.
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