Question

Jim likes to day-trade on the internet. On a good day, he averages a $1100 gain. On a bad day, he averages a $900 loss. Suppose that he has good days 25% of the time, bad days 35% of he time, and the rest of the time he breaks even

Answer 1

Answer:

Jim will incur a loss of $2,400 in the 60-day period under review

Step-by-step explanation:

The question is incomplete. However, one assumption was made in attempting the question, ie, the timeframe was set at 60-days:

Jim likes to day-trade on the internet. On a good day, he averages a $1100 gain. On a bad day, he averages a $900 loss. Suppose that he has good days 25% of the time, bad days 35% of he time, and the rest of the time he breaks even, *what is Jim's balance after a 60-day period* ?

Solution

From the question, given period X = 60 days, and;

Jim's streak is as follows: 0.25X Profit : 0.35X Loss : (100 - (0.25+0.35) Even

Jim's streak = 0.25*60 : 0.35*60 : 0.4*60 = 15 + 21 + 24 (days)

15 profitable days = 15 * $1100 = $16,500

21 bad days 21*$900 = $18,900

24 even days = 24*$0 = $0

Balance after 60 days = $16500+(-$18900)+$0 = $16500-$18900 = -$2400