weeks ago Jerry bought stock at 21 and a half today the stock is valued at 20 and 3/8 we can say the stock is performing at which of the following
The Correct Answer and Explanation is:
To determine how the stock is performing, we need to compare the price Jerry paid for the stock with its current value.
Given:
- Purchase Price: 21 and 1/2 = 21.5
- Current Value: 20 and 3/8 = 20.375
Step 1: Find the difference
21.5 (purchase price) – 20.375 (current price) = 1.125
So, the stock decreased by 1.125 points.
Step 2: Calculate the percentage loss
Percentage Loss=(LossPurchase Price)×100=(1.12521.5)×100≈5.23%\text{Percentage Loss} = \left(\frac{\text{Loss}}{\text{Purchase Price}}\right) \times 100 = \left(\frac{1.125}{21.5}\right) \times 100 \approx 5.23\%
Correct Answer: The stock is performing at a loss.
Explanation
When analyzing stock performance, the key factor is the change in price from the time of purchase to the present. In this case, Jerry bought the stock at $21.50 per share. The current price of the stock is $20.375. To evaluate the performance, we subtract the current price from the original purchase price: 21.5−20.375=1.12521.5 – 20.375 = 1.125
This tells us that the stock has decreased in value by $1.125 per share. This decrease indicates a loss, as the current value is lower than the original purchase price. To fully understand how significant this loss is, we calculate the percentage decrease. By dividing the loss by the original price and multiplying by 100, we get: (1.12521.5)×100≈5.23%\left(\frac{1.125}{21.5}\right) \times 100 \approx 5.23\%
This means that Jerry has lost approximately 5.23% of his investment in this stock. Therefore, we can clearly conclude that the stock is performing at a loss.
In the stock market, such changes are common due to fluctuations in company performance, market trends, and investor sentiment. A loss does not always indicate a permanent decline; sometimes stocks recover. However, based on the current data provided — comparing the past and present values — it is factually accurate to say that the stock is not performing well and is currently underperforming relative to its original purchase price.
