The Graduate Management Admission Test (GMAT) is a requirement for all applicant

Question

The Graduate Management Admission Test (GMAT) is a requirement for all applicants of MBA programs. A variety of preparatory coursesare designed to help applicants improve their GMAT scores, which range from 200 to 800. Suppose that a survey of MBA students reveals that among GMAT scores above 650, 52% took a preparatory course,whereas among GMAT scorers of less than 650,only 23% took a preparatory course. An applicant to an MBA program has determined that he needs a score of more than 650 to get into a certain MBA program, but he feels that his probability of getting that high score is quite low, approximately only10%. He is considering taking a preparatory course that costs $500. He is willing to do so only if his probability of achieving 650 or more doubles. Should he take the preparatory course? What is the reason to support your argument?

Explanation / Answer

Lets take the case in two sections.

Lets assume he takes a preparatory course.Which means that he could be one among the 52% of those who have got a score greater than 650 which is more than double the 10% chance he felt.And even if we think,he got a score less than 650,He could surely be among the 23% who took the preparatory course.

But if we feel,the other way round that without coaching,He could score only 48% above 650 but he could be 77% below 650.

Hence there is a much chance of scoring below 650 without a preparatory course.But there is a good chance of scoring above 650 with a course.

Hence attending the preparatory course is a good idea.

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