What is the net percent gained or lost on a stock with goes down 20% on Monday and then goes up 20% on Tuesday? Use a negative s

Question

1 year ago

13

ign to indicate percentage lost.

1 answer:

barxatty [35] · Answer 1 · 2023-07-27T17:22:50+03:00

The net percentage lost on the stock is 4%

<h3>How to determine the net percentage?</h3>

Let the value of the stock be represented with x.

When it goes down by 20% on Monday, the value is:

Value = (1 - 20%) * x

Value = 0.8x

When it goes up by 20% on Tuesday, the value is:

Value = (1 + 20%) * 0.8x

Value = 0.96x

Recall that the initial value is x.

So, the profit is:

Profit = 0.96x - x

Evaluate the difference

Profit = -0.04x

Express as percentage

Profit = -4%x

Negative value represent a percentage lost.

Hence, the net percentage lost is 4%