Question

Two years ago, you invested $1,000 in a healthcare stock. Your return during the first year was -50 percent, while your return in the second year was 50 percent. Your investment is now worth $1,000. True False

Answer 1

Answer:

The answer is true.

Explanation:

It is true that the investment worth is $1000 because it is given that there is a negative 50 percent yield in the first year and in the second year there is a positive 50 percent yield. Here, negative yield shows some kind of loss and positive yield shows gains. So the loss of first-year is compensated by the gain of the second year. Therefore, the investment worth remains the same at $1000.