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Current Student
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A certain portfolio consisted of 5 stocks, priced at $20, [#permalink]
 20 Jul 2008, 00:15
A certain portfolio consisted of 5 stocks, priced at $20, $35, $40, $45 and $70, respectively. On a given day, the price of one stock increased by 15%, while the price of another decreased by 35% and the prices of the remaining three remained constant. If the average price of a stock in the portfolio rose by approximately 2%, which of the following could be the prices of the shares that remained constant?
A) 20, 35, 70
B) 20, 45, 70
C) 20, 35, 40
D) 35, 40, 70
E) 35, 40, 45
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Current Student
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Re: check this out [#permalink]
20 Jul 2008, 01:44
Make the smallest decrease and the highest increase, and you have:
- for the smallest: 35% of $20 = $7 decrease
- for the highest: 15% of $70 = $10.5 increase
==> maximum increase of the portfolio is $3.5 total
Total value of the portfolio was $20+$35+$40+$45+$70 = $210
So the maximun increase corresponds to 3.5/210 = 1.7%
You cannot be closer to 2%, thus it is $20 that decrease and $70 that increase
==> Answer is (E)
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Current Student
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Re: check this out [#permalink]
20 Jul 2008, 01:53
yep!!! good one oski
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Senior Manager
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Re: check this out [#permalink]
20 Jul 2008, 05:07
E, similar reasoning.
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Re: check this out [#permalink]
21 Jul 2008, 05:31
How did you know which price to increase and decrease? Is it by process of elimination (trying each one by one), or is there a quicker method. Oski wrote: Make the smallest decrease and the highest increase, and you have:
- for the smallest: 35% of $20 = $7 decrease
- for the highest: 15% of $70 = $10.5 increase
==> maximum increase of the portfolio is $3.5 total
Total value of the portfolio was $20+$35+$40+$45+$70 = $210
So the maximun increase corresponds to 3.5/210 = 1.7%
You cannot be closer to 2%, thus it is $20 that decrease and $70 that increase
==> Answer is (E)
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Re: check this out [#permalink]
21 Jul 2008, 06:05
generally we start with the midlle terms and then you move on one side......But depends upon the experience that one selects the limits.....POE
_________________
Every Problem Has a Sloution So keep working
AB
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Current Student
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Re: check this out [#permalink]
21 Jul 2008, 15:09
bigfernhead wrote: How did you know which price to increase and decrease?
Is it by process of elimination (trying each one by one), or is there a quicker method. I decreased the minimum and increased the maximum, therefore the gap I got is the biggest we can get. And it is still not sufficient to reach the 2% mark : so this is the answer. A more general method if you do not see it from the begining is as follow : - compute 2% of the total (here 210*2% = 4.2) - write down the five numbers and compute for each one what it means to increase it by 15% or decrease it by 35% 20 : +3 ; -7 35 : +5.25 ; -12.25 40 : +6 ; -14 45 : +6.75 ; -15.75 70 : +10.5 ; -24.5 - then, "play" with the 10 numbers you get to be as close as possible to this 4.2 
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Re: check this out
[#permalink]
21 Jul 2008, 15:09
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