Answer:
The calculation for ROC is simple in that it takes the current value of a stock or index and divides it by the value from an earlier period. Subtract one and multiply the resulting number by 100 to give it a percentage representation.
Step-by-step explanation:
Rate of change is an extremely important financial concept because it allows investors to spot security momentum and other trends. For example, security with high momentum, or one that has a positive ROC, normally outperforms the market in the short term. Conversely, a security that has a ROC that falls below its moving average, or one that has a low or negative ROC is likely to decline in value and can be seen as a sell signal to investors.
The rate of change is also a good indicator of market bubbles. Even though momentum is good and traders look for securities with a positive ROC, if a broad-market ETF, index, or mutual fund has a sharp increase in its ROC in the short term, it may be a sign that the market is unsustainable. If the ROC of an index or other broad-market security is over 50%, investors should be wary of a bubble.
Hope this helps!
Brain-List?
Hey there! I'm happy to help!
In our problem, 100 is a certain percent of 80. When talking about percents, the word "is" means equals. Let's represent our certain percent with p and solve for it.
100=80p
Let's flip the equation around so p is on the left side.
80p=100
We divide both sides by 80.
p=1.25
As a percent, the increase is 125%.
Have a wonderful day!
Larry ran 2.52 killometers. Since a meter is 0.001 killometers, you have to do 0.001 x 220 which is 0.22 then do 2.3 + 0.22 and get 2.52.
