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Question 1053113: which is better: having a stock that goes up 30% on monday then 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?
Answer by Theo(13342)   (Show Source):
You can put this solution on YOUR website! if it goes up 30%, it's multiplied by 1.3.
this is because x + .3 * x is equal to 1.3 * x.
if it goes down 30%, it's multiplied by .7.
this is because x - .3 * x is equal to .7 * x.
so if you increase it by 30% and then drop it by 30%, you are multiplying it by 1.3 and then multiplying it by .7.
and if you drop it by 30% and then increase it by 30%, you are multiplying it by .7 and then multiplying it by 1.3
since x * 1.3 * .7 is the same as x * .7 * 1.3, you wind up with the same value either way.
assume the original value is 500.
increase it by 30% and it becomes 650.
decrease 650 by 30% and it becomes 455.
assume the original value is 500 again.
decrease it by 30% and it becomes 350.
increase 350 by 30% and it becomes 455.
you wind up with the same value of 455 either way.
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