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14 Aug 2020, 02:43
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A
Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
95%
(hard)
Question Stats:
36% (02:21) correct
64%
(02:04)
wrong
based on 126
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Manfred plans to invest a certain amount of money in stocks and a certain amount in bonds. If he plans to invest a total of $100,000 in stocks and bonds, how much money does he plan to invest on stocks?
(1) If Manfred were to change his plans such that 75% of the planned investment in stocks is diverted to bonds and 75% of the planned investment in bonds is diverted to stocks, then his investment in stocks would be equal to his investment in bonds.
(2) If Manfred were to change his plans such that 50% of the planned investment in stocks is diverted to bonds and 50% of the planned investment in bonds is diverted to stocks, then his investment in stocks would be equal to his investment in bonds.
Are You Up For the Challenge: 700 Level Questions
(1) If Manfred were to change his plans such that 75% of the planned investment in stocks is diverted to bonds and 75% of the planned investment in bonds is diverted to stocks, then his investment in stocks would be equal to his investment in bonds.
(2) If Manfred were to change his plans such that 50% of the planned investment in stocks is diverted to bonds and 50% of the planned investment in bonds is diverted to stocks, then his investment in stocks would be equal to his investment in bonds.
Are You Up For the Challenge: 700 Level Questions
Updated on: 14 Aug 2020, 07:00
Originally posted by RaghavKhanna on 14 Aug 2020, 03:03.
Last edited by RaghavKhanna on 14 Aug 2020, 07:00, edited 1 time in total.
Last edited by RaghavKhanna on 14 Aug 2020, 07:00, edited 1 time in total.
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Total amount invested = $100,000
Stocks = S
Bonds = 100,000 - S
Statement 1:
Amount of stocks diverted to bonds = 0.75S
Amount of bonds diverted to stocks = (100,000 - S)*0.75 = 75000 - 0.75S
Amount of stocks = 0.25S + 75000 - 0.75S
And,
Amount of bonds = 25000 - 0.25S + 0.75S
=> 75000 - 0.5S = 25000 + 0.5S
=> 50000 = S
=> S = 50,000
Statement 1 is sufficient
Statement 2:
Amount of stocks diverted to bonds = 0.5S
Amount of bonds diverted to stocks = (100,000 - S)*0.5 = 50000 - 0.5S
Amount of stocks = 0.5S + 50000 - 0.5S
And,
Amount of bonds = 50000 - 0.5S + 0.5S
=> 50000 = 50000
Can't find S from this.
Statement 2 is insufficient
Answer: A
Stocks = S
Bonds = 100,000 - S
Statement 1:
Amount of stocks diverted to bonds = 0.75S
Amount of bonds diverted to stocks = (100,000 - S)*0.75 = 75000 - 0.75S
Amount of stocks = 0.25S + 75000 - 0.75S
And,
Amount of bonds = 25000 - 0.25S + 0.75S
=> 75000 - 0.5S = 25000 + 0.5S
=> 50000 = S
=> S = 50,000
Statement 1 is sufficient
Statement 2:
Amount of stocks diverted to bonds = 0.5S
Amount of bonds diverted to stocks = (100,000 - S)*0.5 = 50000 - 0.5S
Amount of stocks = 0.5S + 50000 - 0.5S
And,
Amount of bonds = 50000 - 0.5S + 0.5S
=> 50000 = 50000
Can't find S from this.
Statement 2 is insufficient
Answer: A
KaramveerBakshi
Joined: 18 Feb 2020
Last visit: 09 Sep 2021
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Location: India
Schools: HEC Montreal Jindal '23 (S) ISB'22
GMAT 1: 660 Q50 V29
GPA: 3
14 Aug 2020, 06:20
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Total amount = 100,000.
Let amount in stocks = X
Let amount in bonds = Y
X+Y = 100,000 ---- (A)
Statements:
(1) If Manfred were to change his plans such that 75% of the planned investment in stocks is diverted to bonds and 75% of the planned investment in bonds is diverted to stocks, then his investment in stocks would be equal to his investment in bonds.
The equation would look like:
X/4+3Y/4 = Y/4 + 3X/4
X = Y
Therefore, X = Y = 50,000 ( From (A))
Sufficient
(2) If Manfred were to change his plans such that 50% of the planned investment in stocks is diverted to bonds and 50% of the planned investment in bonds is diverted to stocks, then his investment in stocks would be equal to his investment in bonds.
The equation would look like:
X/2 + Y/2 = X/2 + Y/2
This equation doesn't give us anything.
Insufficient.
Hence, the answer is (A).
Let amount in stocks = X
Let amount in bonds = Y
X+Y = 100,000 ---- (A)
Statements:
(1) If Manfred were to change his plans such that 75% of the planned investment in stocks is diverted to bonds and 75% of the planned investment in bonds is diverted to stocks, then his investment in stocks would be equal to his investment in bonds.
The equation would look like:
X/4+3Y/4 = Y/4 + 3X/4
X = Y
Therefore, X = Y = 50,000 ( From (A))
Sufficient
(2) If Manfred were to change his plans such that 50% of the planned investment in stocks is diverted to bonds and 50% of the planned investment in bonds is diverted to stocks, then his investment in stocks would be equal to his investment in bonds.
The equation would look like:
X/2 + Y/2 = X/2 + Y/2
This equation doesn't give us anything.
Insufficient.
Hence, the answer is (A).
