Break-even move after a round trip

EasyFinance & Derivatives~2m

A stock falls $20\%$ in one month, then rises $20\%$ the next. By what percent must it move in a third month to return to its original price? Give a percent to two decimals (a loss is negative).

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Chain the gross factors first: $0.80\times1.20=0.96$ , not $1$ .
Solve $0.96\times g=1$ , so the move is $1/0.96-1$ .

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4.17 (± 0.01)

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Asked at: Citadel, SIG

Break-even move after a round trip

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