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certain portfolio consisted of 5 stocks

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certain portfolio consisted of 5 stocks

by Uva@90 » Sun Jul 12, 2015 8:54 am
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

OA E
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by GMATGuruNY » Sun Jul 12, 2015 9:10 am
Uva@90 wrote: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

OA E
Use reason.
The increase in one price (15%) is LESS THAN HALF the decrease in another price (35%), yet the NET increase is 2%.
Thus, the price that increases must be MUCH HIGHER than the price that decreases.
Only $70 and $20 are sufficiently far apart, implying that the other 3 prices (35,40,45) do not change.

The correct answer is E.
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