Step-by-step explanation:
- If the stock goes up 30%, it's multiplied by
.
The reason is that
- If the stock goes down 20%, it's multiplied by
The reason is that
- If the stock goes down 30%, it's multiplied by
The reason is that
- If the stock goes up 40%, it's multiplied by
.
The reason is that
So
If you increase it by 30% and then drop it by 20%, it means you are multiplying it by and then multiplying it by
. In other words:
So, the net gain is = .04
Assume the original value = 500
Increase it by 30% and it becomes 650
Decrease 650 by 20% and it becomes 520
So, the net gain = 20
Verification:
And
If you drop it by 30% and then increase it by 40%, you are multiplying it by .7 and then multiplying it by 1.4. In other words:
So, the net loss is = 1 - 0.98 = .02
Assume the original value = 500
Decrease it by 30% and it becomes 350.
increase 350 by 40% and it becomes 490.
So, the net loss is = 10
Verification:
Keywords: stock, loss, gain
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