Final answer:
Jerry's stock bought at 21 1/2 ten weeks ago and now valued at 20%, is performing below par. Stocks can experience significant price swings, affecting investors' returns through dividends or capital gains. The correct option is C. Below par
Step-by-step explanation:
When evaluating the performance of Jerry's stock which he bought at 21 1/2 ten weeks ago, we need to understand that it is now valued at 20%. Given that stocks can fluctuate significantly, we look at this situation in terms of whether the stock is performing on par, above par, below par, or at par equality.
The term 'par' in finance typically refers to a stock's face value when issued, but it can also imply a benchmark or standard level of performance.
The phrase 'valued at 20%' is ambiguous and could either mean that the stock has lost 80% of its value or is at 20% of its par value. Under the assumption that we're dealing with a standard interpretation, where the stock's value has decreased, it has underperformed relative to its initial purchase price. We would therefore say the stock is performing below par.
It is essential for investors to remember that investing in stocks carries risks as stock prices can rise or fall dramatically over time, and the return on investment can come in the form of dividends or capital gains. An investor's profit or loss is contingent on these volatile price movements. The correct option is C. Below par