Question

Ms. Bains Hobbes has a portfolio that includes 50,000$instock,$ $75,000$ in cash, and no other holdings. If she wishes to redistribute her holdings so that $80$ percent of the portfolio is in cash, calculate how many dollars of stock must she convert to cash.

• A. $10,000$
• B. $15,000$
• C. $20,000$
• D. $25,000$
• E. $30,000$

Answer 1

The correct option is D $25,000$

Amount in stockings $=50,000$

Amount in cash $=75,000$

Total amount in her portofolio $=50,000+75,000=1,25,000$

$80$ percent of her portofolio should be in cash, so

Amount ot be in cash is $\frac{80}{100}\times 1,25,000=1,00,000$

Amount already in cash is $=75,000$

So, amount to be converted from stock to cash is $1,25,000-1,00,000=25,000$