Question

Which is better having a stock that goes up by 30% on Monday than drops 30% on Tuesday

Answer 1

Answer:

Both stocks will have a net loss of 9%

Complete statement and question:

Which is better: having a stock that goes up 30% on Monday than drops 30% on Tuesday, or a stock drops 30% on Monday and goes up 30% on Tuesday? In each case, what is the net percent gain or loss?

Source:

Previous question that can be found at brainly

Step-by-step explanation:

Four our analysis, let's assume a initial price of $ 10 for both stocks

Stock A

Price on Monday when stock market opens = $ 10

Price on Monday when stock market closes = 10 + 0.3 * 10 = 10 + 3 = $ 13

Price on Tuesday when stock market opens = $ 13

Price on Tuesday when stock market closes = 13 -  0.3 * 13 = 13 -3.9 = $ 9.10

The stock had a net loss of $ 0.90 or 9%

Stock B

Price on Monday when stock market opens = $ 10

Price on Monday when stock market closes = 10 - 0.3 * 10 = 10 - 3 = $ 7

Price on Tuesday when stock market opens = $ 7

Price on Tuesday when stock market closes = 7 + 0.3 * 7 = 7 + 2.10 = $ 9.10

The stock had a net loss of $ 0.90 or 9%