Which is better: having a stock that goes up 30% on Monday than drops 30% on Tuesday, or a stock that drops 30% on Monday and goes up 30% on Tuesday? In each case, what is the net percent gain or loss?
+130518 Let's suppose that the stock's initial value = $100
In the first case.....the stock wll be worth $130 after the first day and [$130]*.70 = $91 after the second
In the second case, the stock will be worth $100 * .70 = $70 after the first day and ($70)(1.30) = $91 after the second
Thus.......the stocks are of equal value after the second day
The original value has decreased by 9% in both cases
+130518 Let's suppose that the stock's initial value = $100
In the first case.....the stock wll be worth $130 after the first day and [$130]*.70 = $91 after the second
In the second case, the stock will be worth $100 * .70 = $70 after the first day and ($70)(1.30) = $91 after the second
Thus.......the stocks are of equal value after the second day
The original value has decreased by 9% in both cases
