SP = CP1 - loss
$\therefore$ 300 = CP1 - 0.1 CP1
300 = 0.9 CP1
CP1 = 300/0.9 ....(1)
- When there was 10% profit,
SP = CP2 + profit
$\therefore$ 300 = CP2 + 0.1 CP2
300 = 1.1 CP2
CP2 = 300/1.1 ....(2)
Total SP of two watches = 300 + 300 = 600
Total CP of two watches = CP1 + CP2 = 606.06
So we can see there is a loss of Rs.6.06
$\therefore$ loss percent = (6.06/600)*100 = 1 % (approximately)
B is the answer.