Return on investment - average return iii

Calculus Level 3

Suppose you have an investment, worth S ( t ) S(t) , which has the following returns, over a five day period: r t = { + 100 % , − 50 % , + 60 % , + 20 % , − 40 % } r_t = \{+100\%, -50\%,+60\%,+20\%,-40\%\}

What is the actual return on your investment (as a percentage) for the five day period?

Assumptions

  • S ( 0 ) ≠ 0 S(0)\neq0


The answer is 15.2.

Josh Silverman by Josh Silverman

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2 solutions

Vedant Dave
May 12, 2014

Suppose you have 100.
On Increasing-
100%=100+100=200.
-50%=100.
60%=160.
20%=192.
-40%=76.8
=>192-76.8=115.2.
(115.2-100)*100/100=15.2%.


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Mayank Holmes
May 8, 2014

let the initial investment be "100' . hence, calculating the increment/decrement from the first to the fifth day we get 115.2 as the final sum!!!!!!!!!

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in previous question, retuns were on first day's investment and in this questio, its on cumulative basis.....WHY THIS DIFFERENT LOGIC?

Navneet Mundhra - 7 years ago

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