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Hi,

Very trivial question but not able to figure it out.

If it is given that

Rm>Em

Ra>Ea

and

Rm-Em = (.94Ra) – (.96Ea)

Then how to conclude Ra-Ea > Rm-Em

I know plugging values shows the same but i am looking for algebraic approach for the same. Tx

 

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2 Answer(s)

Rm-Em = (.94Ra) – (.96Ea)

Rm-Em = ((1-0.06)Ra)-((1-0.04)Ea)

Rm-Em = (Ra-Ea)- (0.06Ra-0.04Ea)

Since Ra>Ea means that  (0.06Ra-0.04Ea) is positive

Thus Ra-Ea>Rm-Em since Rm-Em = (Ra-Ea)-some positive value

Default Answered on August 3, 2017.
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Hi Nitesh,

Plugging in would be apt here but now I think you got the algebra part as well.

@asokan: Nicely explained.

Expert Answered on August 4, 2017.
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