Tangled Treasure...

You come upon 3 chests containing coins. You cannot see inside any of them. Each has a hole in the top and a sign on the front. They are labeled "GOLD," "SILVER," and "GOLD AND SILVER." Each is labeled incorrectly. You are permitted to reach into one box and remove and inspect one coin. You may not peek or feel around inside any chest. Staying within the rules given, how do you label each chest correctly?


The solution is to draw one coin from the chest labeled "GOLD AND SILVER." The identity of that coin determines what is in that chest since it is labeled incorrectly and cannot contain both gold and silver. Once the determination is made for the third chest the sign "GOLD AND SILVER" can be removed. Depending on what was pulled from the chest, the matching sign can then be taken from one of the remaining chests and placed properly. Since each chest is labeled incorrectly, the remaining incorrect sign should be removed and placed on the vacant chest. The "GOLD AND SILVER" sign can now be placed on the last chest and all three will be labeled correctly.