You decide you will buy a stock only if it shows an overall increase over the next 30 days. The first 10 days, it has an average daily increase of $0.30. The next10 days, it has an average daily decrease of $0.45. The last 10 days, it has an average daily increase of $0.25.
a. How much did the stock change over the first 10 days? Show your work.
b. How much did the stock change over the next 10 days? Show your work.
c. How much did the stock change over the last 10 days? Show your work.
d. How much did the stock change altogether?
e. Should you buy the stock? Explain.
(a) 10(+0.30) = +3.00
That's my work so far. Have any of your own?
a. To calculate the change in the stock price over the first 10 days, we need to multiply the average daily increase by the number of days.
Average daily increase: $0.30
Number of days: 10
Change over the first 10 days = Average daily increase * Number of days
= $0.30 * 10
= $3.00
Therefore, the stock changed by $3.00 over the first 10 days.
b. Similar to the first calculation, we need to multiply the average daily decrease by the number of days to find the change in the stock price over the next 10 days.
Average daily decrease: $0.45
Number of days: 10
Change over the next 10 days = Average daily decrease * Number of days
= $0.45 * 10
= $4.50
Hence, the stock changed by $4.50 over the next 10 days.
c. Using the same approach, we can find the change in the stock price over the last 10 days.
Average daily increase: $0.25
Number of days: 10
Change over the last 10 days = Average daily increase * Number of days
= $0.25 * 10
= $2.50
Therefore, the stock changed by $2.50 over the last 10 days.
d. To calculate the total change in the stock price altogether, we sum up the changes over the three periods:
Total change = Change over the first 10 days + Change over the next 10 days + Change over the last 10 days
= $3.00 + $4.50 + $2.50
= $10.00
Thus, the stock changed by $10.00 altogether.
e. Based on your decision criteria, you would only buy the stock if it shows an overall increase over the next 30 days. To determine this, we need to compare the total change in the stock price with zero.
If the total change is greater than zero, it indicates an overall increase, and you should buy the stock. However, if the total change is zero or less than zero, it means the stock either remained the same or decreased over the period, and you should not buy the stock.
In this case, the total change is $10.00, which is greater than zero. Therefore, you should buy the stock according to your criteria of overall increase over the next 30 days.