Question

The value of Stock A changes -$3.68, and the value of Stock B changes -$3.72. Which stock has the greater loss?

Answer 1

Stock B has the greater dollar loss because `-$3.72` is a bigger negative number than is `-$3.68`.

Explanation:

Stock B has the greater dollar loss because `-$3.72` is a bigger negative number than is `-$3.68`

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However, and this is important in the field of stock investing, when talking about losses in the stock market, the percentage loss is far more important to talk about. (We aren't given any information to calculate this, but I think it's important to talk about).

For instance, let's say stock B, which lost `-$3.72` started at $100 and so the loss is 3.72%. Not a great day for that stock but not too bad.

But what if stock A (which had the smaller dollar loss of `-$3.68`) started at `$3.69`? And so it's now worth `$0.01`? The percentage loss is almost 100%. It's a smaller dollar loss but a much bigger percentage loss.

Overall, which stock had the bigger loss? Stock A because it lost almost 100% of its value.