Hello, reiward!
Sorry, your friends are right . . .
A square is inscribed in a circle, and another circle is inscribed in the square.
What is the ratio of the area of the larger circle to the small circle?
Consider one quadrant of the diagram.
Code:
*
| *
| * B
A * * - - - - *
| * * | *
| * |
| * * | *
| * | *
| * *
O * - - - - - * - - *
C
The radius of the large circle is: . 
The area of the large circle is: . 
Since
is a 45-45-90 right triangle: . 
The radius of the small circle is: . 
The area of the small circle is: . ^2 \:=\:\frac{\pi R^2}{2})
The ratio of areas is: . 