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.
10 times .30 = $3.00
10 times .45 = down 4.50
10 times .25 = 2.50
2.50 + 3.00 = 5.50
5.50 - 4.50 = 1.00
buy it.
To answer these questions, we need to calculate the change in stock price for each time period and then sum up those changes to determine the overall change.
a. To calculate the change in stock price over the first 10 days, we need to multiply the average daily increase ($0.30) by the number of days (10).
Change over the first 10 days = $0.30 * 10 = $3.00
b. To calculate the change in stock price over the next 10 days, we need to multiply the average daily decrease ($0.45) by the number of days (10).
Change over the next 10 days = -$0.45 * 10 = -$4.50
(Note: The negative sign indicates a decrease in stock price.)
c. To calculate the change in stock price over the last 10 days, we need to multiply the average daily increase ($0.25) by the number of days (10).
Change over the last 10 days = $0.25 * 10 = $2.50
d. To calculate the overall change in stock price, we need to sum up the changes from each time period.
Overall change = Change over the first 10 days + Change over the next 10 days + Change over the last 10 days
Overall change = $3.00 + (-$4.50) + $2.50 = $1.00
e. Based on the given information, the overall change in the stock price is $1.00. However, since the stock only shows an overall increase in the last 10 days, it does not meet your requirement of an overall increase over the next 30 days. Therefore, you should not buy the stock.