Investor behaviour · Question 12 of 12
Which statements about recovering price losses are correct?
2 answers are correct. Hard
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Answer
- A After a 50% loss, a 100% rise is needed
- B After a 20% loss, a 25% rise is needed
Explanation
After a 50% loss, 100 euros become 50 euros, and the value must double to get back to 100 euros. After a 20% loss, 80 euros remain, and 20 euros more is 25% of that. The larger the loss, the more the price has to rise afterwards.