What is the investor's profit at the end of the week in the following case: An investor bought a stock for $4 on Monday. The next day the price dropped 15%. It increased over the rest of the week at 5% per day.
- print Print
- list Cite
Expert Answers
calendarEducator since 2010
write12,551 answers
starTop subjects are Math, Science, and Business
The price of the stock on Monday when they were bought is $4. It crashes by 15% on Tuesday to reach $4*(1 – 15%) = $4*0.85.
The price recovers by 5% over the rest of the week. For three days the price rises 5% everyday so the price at the end of the week is:
$4*0.85*(1.05)^3 = $3.93
For the original price of $4 at which the stock was bought the price at the end of the week is $3.93.The investor’s loss is (4 – 3.93)*100/4 = 1.75%
Therefore the investor has not made a profit but a loss of 1.75%
Related Questions
- Maximum profit, given revenue and cost equations. A small company produces and sells x products...
- 2 Educator Answers
- At a supermarket a worker is paid $10 per hour for 8 hours a day. The pay is increased by 25% for...
- 1 Educator Answer
- Leap day falls on Monday this year on what day of the week will the next leap day fall
- 1 Educator Answer
- A trader bought articles for 900, 5 were damaged and he sold each of the rest at 2 more than what...
- 1 Educator Answer
- Math problem about hours worked and wages earned.In a regular week, there are 5 working days and...
- 2 Educator Answers
These little things we have to keep in mind. The stock market is open only 5 days in a week, Saturday and Sunday are a holiday. No wonder my answer was not matching the one in the book. Considering a rise for only three days I get the right answer.
Student Answers