That picture is not worth a thousand words.
The question is how much he lost. Your analysis depends upon an assumption that his losses are equivalent to the face value of the fraudulent cheque he held. This is patently incorrect. A fraudulent cheque has little if any value.
Try a reductio ad absurdum: say the thief had tempted him by offering him a cheque for one million pounds. On your analysis, he has lost one million pounds. One minute he has a horse worth about 10 to 20 pounds perhaps, the next (according to your analysis) he has a million pounds that he loses simply because for a moment he held a worthless piece of paper with a large number on it.
If it weren’t for that horse, I wouldn’t have gone to college.
What the little purple guy was trying to say is that the horsedealer still had £20 of the money the shopkeeper gave him - so he was only out £10 on that part of the deal. The rest is not window dressing either - it’s the value of the horse.
Let’s form a posse and string up that horse thief!
:smack: Yes, it’s twenty he’s out. Don’t know how I missed that last night.
This was apparantly a mensa test question of 1991 .
He lost £20, but in reality it was probably closer to £30, since he was expecting to make another £10 profit from selling the horse that’s now lost, along with any work he put into it.
He lost 40 pounds and a horse. He paid 30 pounds to the shopkeeper, he paid 10 pounds change to the scammer and gave the scammer the horse.
That’s all the stuff he doesn’t have anymore that he had originally.
He lost £10 and a horse of indeterminate value.
£20 of the 30 he returned to the shopkeeper were funds from the bogus check, only the £10 to replace what the scammer took came out of his pocket.
Whatever he initially paid for the horse is irrelevant, since he’d already exchanged that money before the suspect transaction took place. Since he no longer owned that £10, he couldn’t very well lose it.
And we don’t know how much the horse would have been worth to an honest buyer.
ETA: My bad for not reading the whole thread carefully. Change my answer to “What Princhester said.”
For fear of being new AND stupid let me give it a try.
The shopkeeper cashes a check for 30 dollars. 10 goes to the horse thief and 20 goes to the horse dealer. The check bounces so the horse dealer has to give the 20 in his pocket back plus the ten he gave the horse thief. SO he is out the horse and twenty dollars.
£40 altogether.
The shopkeeper gave him £30, which he had to give back because of the bum cheque. The horsedealer had previously bought the horse for £10, it clearly says.
Add the two amounts together and get £40 total that the horsedealer is out altogether.
The purchaser gains £10 and the horse.
The shopkeeper breaks even, because he was reimbursed.
Can’t agree with you there.
Suppose I buy a house (not a horse) for £100,000, and spend £100,000 fixing it up to make it ready to sell.
If someone comes along and burns it down, I’ve lost £200,000. It doesn’t matter what the market value of the house was.
OTOH, suppose it doesn’t get burned but I can’t sell it for $200,000… well then it’s a different problem. After I sold it I’d have lost the difference between my cost and the (lower) selling price.
But again, that’s a different problem.
If the dealer paid £10 for the horse and spent £5 on hay and boarding before he could sell it, he is out £15.
“Market Value” is irrelevent. Expenditures do matter if you want to determine how much someone lost on a transaction.
Not quite. The shopkeeper (SK) gave him 30 in cash. Then he had to give it back. That transaction has a balance of zero. The problem for the horsedealer (HD) is that he took 30 from the shopkeeper, and lost 10 of it. So color code the money, all money is in units of ten. Green is a £10 note, orange is a £10 coin. (None of this is necessary, but it’s fun for me.)
HD: ::buys horse:: 
Mr. Skämmer: Hello. I am visiting from abroad. Can I buy your £20 horse? If I give you a traveler’s check for 30 can I have 10 in change? I need to buy lunch too.
HD: Sure thing!
HD: Hi, neighbor. Can you cash this check for 30?
SK: Yes, here you go, take these happy orange coins. 
HD: Thanks!
HD: Here Mr. Skämmer, the horse is yours, and here’s your change!
Mr. Skämmer: Thanks! Bye! ::gallops off in a strange hurry::
SK: HD, you asshole! This check is worthless! It’s says “AmeriCON Express”! Give me back my coins!
HD: Crap! I’ll pay you back right this second. … um… ::breaks piggy bank:: …
And so, HD is out plus the £10 profit he would have made from the horse.
This is realy an essay question and not multiple choice. It comes down to the definition of “lose,” as folks above have demonstated.
Or he bought it only one hour before Mr. Skämmer came buy and spent nothing on feeding and housing the beast. I don’t think you can enter the unknown information into the equation as it’s presented.
Otherwise we can just as easily add that he used the GPS chip he had injected into the horse’s ear to track down Mr. Skämmer, beat the snot out of him, take back the horse plus the entire contents of Skämmer’s wallet, for a net profit of £120.
What?! If you think the definition of “how much money did you lose” is “an essay question” open to interpretation, don’t buy any financial derivatives!
No, he lost 30 to the swindler (for the bounced checkque* that he had to make good on), and the 10 pounds he paid for the horse.
Trader starts the day with (say) 50 pounds in cash, and no horse. (Any number will do.)
Later that day, he spends 10 of it to buy a horse - now has assets of 40 pounds and a horse.
The net of the entire “bounced cashed checkque* for 30 pounds for the horse” story means he’s lost the horse (to the swindler), and paid 30 pounds out of pocket to the shopkeeper for the bad checkque*: he had to return the 10 pounds “profit” from the shopkeeper’s change to the shopkeeper.
**At the end of the day, he goes home with 10 pounds left in his pocket, and (still) no horse.
**
If I left home with 50 pounds and no horse, and came home after work with 10 pounds and no horse, I’d say I lost 40 pounds. How would anybody say any different?
*checkque - n. A form of bank payment recognized on both sides of the Atlantic among English-speaking peoples.
He doesn’t pay the shopkeeper for the bad check, he simply has to return the money he received for it. Unfortunately he already gave £10 to the scammer (the supposed change), which are a loss, but that’s all he lost. That, and a horse of unknown value, presumeably between £10 and £20 (the purchase price and the indicated resale value).
e: or to do it your way, he starts with 50, then has 80 after cashing the check, then 70 after giving the scammer 10, then 40 after repaying the shopkeeper.
Buys a horse for 10. Total: -10
Gets and cashes a check for 30. -10 + 30. Total: 20;
Gives 10 change. 20 - 10. Total: 10;
Returns 30 to Check-Casher-Man 10 - 30. Total: -20;