A Certain Stock Starts The Day At $27 Per Share. If It Drops $2 During The Day, What Is Its Closing Value?A. $25 B. $24 C. $24.7 D. $25.8

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Problem Statement

A certain stock starts the day at $27 per share. If it drops $2 during the day, what is its closing value?

Step-by-Step Solution

To find the closing value of the stock, we need to subtract the drop in value from the initial value.

Initial Value

The initial value of the stock is $27 per share.

Drop in Value

The stock drops $2 during the day.

Closing Value Calculation

To find the closing value, we subtract the drop in value from the initial value:

Closing Value = Initial Value - Drop in Value = $27 - $2 = $25

Answer

The closing value of the stock is $25 per share.

Discussion

This problem requires basic arithmetic operations, specifically subtraction. The student needs to understand the concept of initial value and drop in value and apply the correct operation to find the closing value.

Key Concepts

  • Initial value
  • Drop in value
  • Subtraction operation

Real-World Application

This problem has real-world applications in finance and economics. Understanding the concept of initial value and drop in value is crucial in making informed investment decisions.

Practice Problems

  1. A certain stock starts the day at $30 per share. If it rises $3 during the day, what is its closing value?
  2. A certain stock starts the day at $25 per share. If it drops $1 during the day, what is its closing value?

Solutions

  1. Closing Value = Initial Value + Rise in Value = $30 + $3 = $33
  2. Closing Value = Initial Value - Drop in Value = $25 - $1 = $24

Conclusion

In conclusion, the closing value of a stock can be found by subtracting the drop in value from the initial value. This problem requires basic arithmetic operations and has real-world applications in finance and economics.

Additional Resources

For more practice problems and solutions, visit our website or download our mobile app.

Related Topics

  • Basic arithmetic operations
  • Finance and economics
  • Investment decisions

Tags

  • Stock market
  • Finance
  • Economics
  • Arithmetic operations
  • Investment decisions

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Frequently Asked Questions

Q1: What is the initial value of a stock?

A1: The initial value of a stock is the price at which it starts the day.

Q2: What is the drop in value of a stock?

A2: The drop in value of a stock is the amount by which its price decreases during the day.

Q3: How do I calculate the closing value of a stock?

A3: To calculate the closing value of a stock, you need to subtract the drop in value from the initial value.

Q4: What is the formula for calculating the closing value of a stock?

A4: The formula for calculating the closing value of a stock is:

Closing Value = Initial Value - Drop in Value

Q5: Can I use addition instead of subtraction to calculate the closing value of a stock?

A5: No, you cannot use addition instead of subtraction to calculate the closing value of a stock. If the stock price rises, you need to use addition to calculate the new value.

Q6: How do I calculate the new value of a stock if it rises?

A6: To calculate the new value of a stock if it rises, you need to add the rise in value to the initial value.

Q7: What is the formula for calculating the new value of a stock if it rises?

A7: The formula for calculating the new value of a stock if it rises is:

New Value = Initial Value + Rise in Value

Q8: Can I use the same formula to calculate the closing value of a stock if it drops?

A8: No, you cannot use the same formula to calculate the closing value of a stock if it drops. You need to use the formula:

Closing Value = Initial Value - Drop in Value

Q9: What is the difference between the closing value and the new value of a stock?

A9: The closing value of a stock is the price at which it ends the day, while the new value of a stock is the price at which it starts the next day.

Q10: Why is it important to understand the concept of initial value and drop in value?

A10: It is important to understand the concept of initial value and drop in value because it helps you make informed investment decisions and calculate the correct value of a stock.

Additional Resources

For more practice problems and solutions, visit our website or download our mobile app.

Related Topics

  • Basic arithmetic operations
  • Finance and economics
  • Investment decisions

Tags

  • Stock market
  • Finance
  • Economics
  • Arithmetic operations
  • Investment decisions