Correct Answer - Option 1 : 10%

**Given:**

Mark up in cost price = 20%

Selling price, SP = (100 – 25)% × Market price

**Concept used:**

Market price × (100 – discount)% = Selling price

**Calculation:**

Let the market price be MP.

SP = 75% × MP

MP = 120/100 × CP

⇒ CP × 12/10 × 3/4 = SP

⇒ CP × 9/10 = SP

⇒ SP/CP = 9/10

(CP – SP)/CP = (10 – 9)/10

CP – SP = loss, L

⇒ L/CP = 1/10

L/CP × 100 = 1/10 × 100

⇒ Loss percentage, L% = 10%

**∴ The sale of the article results in a loss of 10%.**