Simon's stocks fell 50%, then rose 75%. Is he even yet?
Simon invested $8,000 in the stock market. Six months later, his stocks were down 50%. Over the next three months, they went up 75% from that lower point. At this point, has Simon broken even, is he ahead, or has he lost money overall?
Reveal the answer
He has still lost money. The 50% drop takes $8,000 to $4,000; a 75% rise on that smaller base only brings it to $7,000, 75% of $4,000 is $3,000, not the $4,000 he'd need to get back to even. Percentage changes aren't symmetric around a moving base. It's one of four items Maggie Toplak, Richard West and Keith Stanovich added in 2014 to extend Shane Frederick's original three-question Cognitive Reflection Test.