The company with the largest absolute dollar increase has the most significant change in dollars; the one with the largest relative increase has the most notable percentage change. Investments are safer when less volatile and riskier with higher volatility. The highest expected return often comes with higher risk.
Step-by-step explanation:
When comparing changes in value among different companies, the company with the most significant change in dollars would be the one with the greatest absolute dollar amount change. On the other hand, the company with the most notable percentage change would be the one that has the largest relative change compared to its original value. If a company's stock value increases from $10 to $12, this is a $2 increase. The percentage change in this case is 20% in the first year (calculated as $2/$10). However, if the same company gets another $2 increase the next year, the percentage change decreases since it would be $2/$12 or 16.7%. This demonstrates that to maintain the same percentage growth rate, the absolute change in value must increase each year.
Regarding investments, the safest investment would theoretically be the one with the least volatility or the lowest risk of losing value. Conversely, the riskiest investment would be the one with the highest volatility or potential for large fluctuations in value. The investment with the highest expected return is typically associated with higher risk. Without specific financial data, one can only hypothesize on these aspects based on the nature of each investment.
The probable question can be: 2. In a hypothetical scenario, if you were to compare changes in value among different companies, which company would show the most significant change in dollars?
3. Without specific financial data, imagine assessing percentage changes among various companies. In your hypothetical analysis, which company would exhibit the most notable percentage change?