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Amy’s retirement portfolio contains only stocks and bonds. At the begi [#permalink]
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22 Nov 2016, 05:52
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Re: Amy’s retirement portfolio contains only stocks and bonds. At the begi [#permalink]
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22 Nov 2016, 06:43
Bunuel wrote: Amy’s retirement portfolio contains only stocks and bonds. At the beginning of 2016, her portfolio had an allocation of 60% stocks and 40% bonds. Over the course of 2016, the total value of her portfolio increased by 8%, with the value of her stock holdings increasing by 10%. By what percent did the value of her bond holdings increase?
A. 4% B. 5% C. 6% D. 7% E. 7.5% B Let the total value of her portfolio be $100,000 then the value of her stocks will be $60,000 and the value of her bonds will be $40,000 Her total portfolio value increased by 8% to $108,000 her stock holding value increased by 10% to $66,000 so her bond increased to $108,000$66,000= $42000 required = $42,000$40,000/$40,000 = 1/20 = 5%



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Re: Amy’s retirement portfolio contains only stocks and bonds. At the begi [#permalink]
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22 Nov 2016, 08:14
Bunuel wrote: Amy’s retirement portfolio contains only stocks and bonds. At the beginning of 2016, her portfolio had an allocation of 60% stocks and 40% bonds. Over the course of 2016, the total value of her portfolio increased by 8%, with the value of her stock holdings increasing by 10%. By what percent did the value of her bond holdings increase?
A. 4% B. 5% C. 6% D. 7% E. 7.5% As usual a tabular approach works best for me  Attachment:
Capture.PNG [ 5.25 KiB  Viewed 1472 times ]
Thus total value of Bond at the end of 2016 is 420 ( ie, 1080  660 ) So, Per unit value of Bond at the end of 2016 is \(\frac{420}{40} = 10.50\) Hence, percentage increase is \(\frac{0.50}{10}*100 =5\)%, answer will be (B)
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Re: Amy’s retirement portfolio contains only stocks and bonds. At the begi [#permalink]
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22 Feb 2017, 22:08
Bunuel wrote: Amy’s retirement portfolio contains only stocks and bonds. At the beginning of 2016, her portfolio had an allocation of 60% stocks and 40% bonds. Over the course of 2016, the total value of her portfolio increased by 8%, with the value of her stock holdings increasing by 10%. By what percent did the value of her bond holdings increase?
A. 4% B. 5% C. 6% D. 7% E. 7.5% Official solution from Veritas Prep. If you recognize that this is a weighted average problem, you can employ the weighted average Mapping Strategy to solve. You know that the weighted average of growth is 8% and that the growth from stocks is 10%, so you can draw your map accordingly: x8%10% You also know that the ratio of stocks to bonds is 3:2, meaning that the distances from x% to 8% and from 8% to 10% will follow a ratio of 3:2, with the more heavilyweighted stocks (10%) having the shorter distance. So since there are two places from 8 to 10 that means that x will be three places from 8, meaning that the answer is 5%, answer choice B. Alternatively, you can solve algebraically or by picking numbers. Since you're working with percent changes, if you want to pick numbers a good place to start is to pick a number like $1,000 for her total value. That would mean that she started with $600 in stocks, from which a 10% increase would mean that stocks gained her $60. Since her total value increased from $1000 to $1080, that means that bonds needed to account for the other 20% gain. Given a starting value of $400 in bonds, you can then ask what percent of $400 is $20, and the answer is 5%.
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Amy’s retirement portfolio contains only stocks and bonds. At the begi [#permalink]
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16 Sep 2017, 11:35
Stupid question. Trying to solve this with weighted average formula, but for some reason it doesn't work. (x is bond return) \(\frac{0.6*10+0.4*x}{10+x}\)= 8 6+0.4x=80+8x 7.6x= 74



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Amy’s retirement portfolio contains only stocks and bonds. At the begi [#permalink]
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16 Sep 2017, 12:45
Bunuel wrote: Amy’s retirement portfolio contains only stocks and bonds. At the beginning of 2016, her portfolio had an allocation of 60% stocks and 40% bonds. Over the course of 2016, the total value of her portfolio increased by 8%, with the value of her stock holdings increasing by 10%. By what percent did the value of her bond holdings increase?
A. 4% B. 5% C. 6% D. 7% E. 7.5% inter , I ran into exactly the same problem. I don't use the scale method or alligation. I stayed with weighted average, but I used different numbers and got the answer. I kept everything in decimals because x is a percent; x is really \(\frac{x}{100}\). This weighted average works, where x = percent return on bonds: (.6)(.1) + (.4)(x) = .08 .06 + .4x = .08 .4x = .02 x = \(\frac{.02}{.4}\) x = .05 = 5 percent ANSWER B
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Re: Amy’s retirement portfolio contains only stocks and bonds. At the begi [#permalink]
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16 Sep 2017, 13:09
Thanks  just realized everything is already in percents.



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Amy’s retirement portfolio contains only stocks and bonds. At the begi [#permalink]
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16 Sep 2017, 13:51
inter wrote: Thanks  just realized everything is already in percents. inter  this question is really basic, but now I'm a little scrambled : when you say "everything is already in percents," what, in weighted average terms, do you mean? I usually work with rounder numbers (I change decimal percentages to integers). I went wrong by multiplying the weights, instead of the percentages, by 100 to get rounder numbers. I also know that I could multiply the percentages by 100 and it works (result is .4x = 2, x = 5, and I've included the "percent" already by multiplying all the percents by 100). For the future: if "everything is already in percents," do you find that it is easier to just leave them that way? Or did you intend something else?
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Re: Amy’s retirement portfolio contains only stocks and bonds. At the begi [#permalink]
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14 Dec 2017, 08:21
Bunuel wrote: Amy’s retirement portfolio contains only stocks and bonds. At the beginning of 2016, her portfolio had an allocation of 60% stocks and 40% bonds. Over the course of 2016, the total value of her portfolio increased by 8%, with the value of her stock holdings increasing by 10%. By what percent did the value of her bond holdings increase?
A. 4% B. 5% C. 6% D. 7% E. 7.5% We can let p = the value of Amy’s portfolio at the beginning of 2016. We are given that she initially had 60% stocks or 0.6p and 40% bonds or 0.4p. Since the total value of her stock holdings increased by 10% and the total value of her portfolio increased by 8%, we can create the following equation in which n is the percentage increase of the bond holdings. 1.1(0.6p) + (1 + n/100)(0.4p) = 1.08p 0.66p + [(100 + n)/100)](0.4p) = 1.08p 0.66p + [(40p + 0.4pn)/100] = 1.08p Multiplying the entire equation by 100, we have: 66p + 40p + 0.4pn = 108p 106p + 0.4pn = 108p 0.4pn = 2p 0.4n = 2 n = 2/0.4 = 5 Answer: B
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Re: Amy’s retirement portfolio contains only stocks and bonds. At the begi [#permalink]
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12 Jan 2018, 14:10
Hi All, This question can be solved in a number of different ways, including algebraically and by TESTing VALUES. It's ultimately a Weighted Average question though, so here's how you can approach it with that formula: Since we have 60% stocks and 40% bonds, the ratio is 6/4 = 3/2... meaning that for every 3 stocks we have 2 bonds. We know that the value of the stocks increased by 10% and the TOTAL value of the portfolio increased by 8%. We're asked to find the increase in the value of the bonds.... X = increase in value of the bonds [3(10) + 2(X)] / (5) = 8 30 + 2X = 40 2X = 10 X = 5 Thus, the value of the bonds increased by 5% Final Answer: GMAT assassins aren't born, they're made, Rich
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