Step-by-step explanation:
- If the stock goes up 30%, it's multiplied by [tex]1.3[/tex].
The reason is that [tex]x + .3 \times x=1.3\times x[/tex]
- If the stock goes down 20%, it's multiplied by [tex]0.8[/tex]
The reason is that [tex]x - .2 \times x = 0.8 \times x[/tex]
- If the stock goes down 30%, it's multiplied by [tex]0.7[/tex]
The reason is that [tex]x - .3 \times x = 0.7 \times x[/tex]
- If the stock goes up 40%, it's multiplied by [tex]1.4[/tex].
The reason is that [tex]x + .4 \times x=1.4\times x[/tex]
So
If you increase it by 30% and then drop it by 20%, it means you are multiplying it by [tex]1.3[/tex] and then multiplying it by [tex].8[/tex]. In other words:
[tex]1.3 \times 0.8=1.04[/tex]
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:
[tex]500 \times .04=20[/tex]
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:
[tex].7 \times 1.4=0.98[/tex]
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:
[tex]500 \times .02=10[/tex]
Keywords: stock, loss, gain
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