{"id":203930,"date":"2025-03-21T03:00:56","date_gmt":"2025-03-21T03:00:56","guid":{"rendered":"https:\/\/learnexams.com\/blog\/?p=203930"},"modified":"2025-03-21T03:00:58","modified_gmt":"2025-03-21T03:00:58","slug":"based-on-the-wcrs-screenshot-below-if-at-the-end-of-2013-you-had-invested-an-equal-weighted-portion-of","status":"publish","type":"post","link":"https:\/\/www.learnexams.com\/blog\/2025\/03\/21\/based-on-the-wcrs-screenshot-below-if-at-the-end-of-2013-you-had-invested-an-equal-weighted-portion-of\/","title":{"rendered":"Based on the WCRS screenshot below, if at the end of 2013 you had invested an equal weighted portion of"},"content":{"rendered":"\n

Based on the WCRS screenshot below, if at the end of 2013 you had invested an equal weighted portion of<\/p>\n\n\n\n

$100,000<\/p>\n\n\n\n

in NVIDIA and nine other companies that went bankrupt, how would your performance compare to the SPX return at this time, and what does this-imply about the nature of stock market returns?\\\\nYou would haye performed roughly the same as the SPX. This illustrates the even synmetry of the – market, with winhers and losers equally offsetting each other.\\\\nYou would have underperformed the SPX by approximately<\/p>\n\n\n\n

746%<\/p>\n\n\n\n

. This demonstrates the negative asymmetry of stock market returns: You would have outperformed the SPX by over<\/p>\n\n\n\n

1000%<\/p>\n\n\n\n

. This exemplifies the positive asymmetry of stock market returns. asymmetry of stock market returns.<\/p>\n\n\n\n

The correct answer and explanation is:<\/mark><\/strong><\/p>\n\n\n\n

The correct answer is:<\/p>\n\n\n\n

“You would have outperformed the SPX by over 1000%. This exemplifies the positive asymmetry of stock market returns.”<\/strong><\/p>\n\n\n\n

Explanation:<\/h3>\n\n\n\n
    \n
  • At the end of 2013, if you had invested $100,000<\/strong> equally across NVIDIA (NVDA) and nine other companies that went bankrupt<\/strong>, each stock would have received $10,000<\/strong>.<\/li>\n\n\n\n
  • The nine bankrupt companies would have resulted in a total loss of $90,000<\/strong>.<\/li>\n\n\n\n
  • However, NVIDIA has been one of the best-performing stocks over the past decade, increasing in value by well over 10,000%<\/strong> since 2013.<\/li>\n\n\n\n
  • Even if NVIDIA had grown by just 10,000% (100x)<\/strong>, your $10,000 investment in NVIDIA alone<\/strong> would be worth $1,000,000<\/strong> today.<\/li>\n\n\n\n
  • This means that despite losing 90% of your initial investments<\/strong>, the extreme gain in a single winner more than offsets the losses.<\/li>\n<\/ul>\n\n\n\n

    Implication:<\/h3>\n\n\n\n

    This highlights the positive asymmetry of stock market returns<\/strong>:<\/p>\n\n\n\n

      \n
    • Gains in a few stocks can vastly outweigh losses in others.<\/strong><\/li>\n\n\n\n
    • Stock market returns are not evenly distributed<\/strong>; they are driven by a small number of extreme winners<\/strong> (e.g., NVIDIA, Apple, Amazon).<\/li>\n\n\n\n
    • This is why diversification can sometimes limit upside potential, and why picking just one major winner can transform a portfolio<\/strong>.<\/li>\n<\/ul>\n\n\n\n

      Would you like a deeper analysis with numbers?<\/p>\n","protected":false},"excerpt":{"rendered":"

      Based on the WCRS screenshot below, if at the end of 2013 you had invested an equal weighted portion of $100,000 in NVIDIA and nine other companies that went bankrupt, how would your performance compare to the SPX return at this time, and what does this-imply about the nature of stock market returns?\\\\nYou would haye […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[25],"tags":[],"class_list":["post-203930","post","type-post","status-publish","format-standard","hentry","category-exams-certification"],"_links":{"self":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/203930","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/comments?post=203930"}],"version-history":[{"count":0,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/203930\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/media?parent=203930"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/categories?post=203930"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/tags?post=203930"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}