Money Quiz: Can you work it out? Poll results/discussion

Premier_2

chardir wrote: »

The answer's E: None of them give you any growth.

That depends whether you're buying long or buying short, and whether you do so at the right time

sparky6840

I'd say "a" for a small gain :mad:

chimp_choker

Premier wrote: »

That depends whether you're buying long or buying short, and whether you do so at the right time

CFD's are the way to go...........

Consumerist

Schamansky wrote: »

Then figures don't lie; now someone tell me why.

OK. Consider a simplified case, starting at 1,000

Increasing by 10% (= 100) gives 1,100

Now decreasing by 10% (= 110, NOT 100) gives 990

So the decrease in the index (110) is larger than the increase (100), even though the percentage is the same. The 10% decrease is applied to a higher number than the 10% increase was applied to.

King_Weasel

I have good reason to recall the earlier occasion when this question appeared here as Martin quoted my message to explain the correct answer. I shan't repeat it now (can't find it anyway - has it disappeared?) but will merely say using a calculator crrectly would give you the right answer but won't explain why. So I'd say the most helpful answers above do not rely on calculations.

ayayay

If you are a regular monthly investor, then you would be quids in with B.

Milarky

Whilst the answer is 'C', the correct strategy is 'A' - since this produces superior returns over 'C' for 9 out of 10 years. It's only in the final year that it produces a negative return. (I understand that wasn't the point being made that 90% of 110% is always less than '1') as 'C' is intended to produce no return..

mikki-b

I worked as a volunteer maths tutor for 10 years. According to the basic skills agency, over 50% (thats half if you don't know!!!) don't understand percentages, or have a clue how to work them out. So I'm not surprised by the poll result. I've met people with degrees who struggle. :eek:

Debt_Free_Dreamer

It is D - They are all the same.


Start 100.00 100.00
Year 1 110.00 90.91
Year 2 121.00 82.64
Year 3 133.10 75.13
Year 4 146.41 68.30
Year 5 161.05 62.09

Year 1 146.41 68.30
Year 2 133.10 75.13
Year 3 121.00 82.64
Year 4 110.00 90.91
Year 5 100.00 100.00

JimmyTheWig

Debt_Free_Dreamer wrote: »

It is D - They are all the same.


Start 100.00 100.00
Year 1 110.00 90.91
Year 2 121.00 82.64
Year 3 133.10 75.13
Year 4 146.41 68.30
Year 5 161.05 62.09

Year 1 146.41 68.30 ***
Year 2 133.10 75.13
Year 3 121.00 82.64
Year 4 110.00 90.91
Year 5 100.00 100.00

How did you work out, for example, the line marked ***?