anonymous one year ago If a stock gains 50 percent one year and loses 50 percent of its value the next year, is it accurate to say that its mean growth over the full two-year period was (50 + -50)/2 = 0%?

1. anonymous

no

2. anonymous

suppose it is worth $100 and increases by 50% what is it worth now?` 3. anonymous @satellite73 200? 4. anonymous no that is a 100% increase what is 50% of 100? 5. anonymous @satellite73 50? So would you add 50 to 100 and the total would be 150? 6. anonymous yes 7. misty1212 HI!! 8. misty1212 if it is now worth$150 and decreases by 50% which is by half, what is it worth now?

9. anonymous

@misty1212 75?

10. anonymous

yup

11. anonymous

so it is not 0 as an average, it has lost 25% of its value

12. anonymous

the math teacher way is $1.50\times .50=0.75$

13. anonymous

so it has 75% of its initial value

14. misty1212

which is the same as saying it lost 25%!

15. anonymous

@misty1212 @satellite73 Awesome!! Thank you so much. That makes much more sense. I appreciate it

16. anonymous

yw

17. misty1212

$\color\magenta\heartsuit$

18. misty1212

nice video btw