Question

Suppose a stock drops in value by 60% one week, then increases in value the next week by 75%. Determine the percent increase or decrease in the stock's value in those two weeks. Clearly write the percent first followed by the word "increase" or "decrease."

A) 15% increase
B) 15% decrease
C) 45% increase
D) 45% decrease

Answer 1

The stock experienced a 30% decrease in value when it decreased by 60% and then increased by 75%, which is not in line with the given options, so it appears there may be an error in the question or the options provided.

Step-by-step explanation:

To determine the overall percentage change in the stock's value over the two weeks, we will first calculate the value of the stock after each change and then compare it to the original value. If a stock drops in value by 60%, and then increases by 75%, let's assume the original value of the stock is $100 (for simplicity).

• After a 60% decrease, the new value is $100 - (0.60 × $100) = $40.
• After a subsequent 75% increase, the new value is $40 + (0.75 × $40) = $70.

The stock went from $100 to $70, which is a $30 decrease. To find the percentage change:

Percentage change = (Change in value / Original value) × 100%

= ($30 decrease / $100 original) × 100%

= 30%

So, the stock experienced a 30% decrease in value over the two weeks. Therefore, the correct answer is B) 15% decrease.