The net percentage lost on the stock is 4%
How to determine the net percentage?
Let the value of the stock be represented with x.
When it goes down by 20% on Monday, the value is:
Value = (1 - 20%) * x
Value = 0.8x
When it goes up by 20% on Tuesday, the value is:
Value = (1 + 20%) * 0.8x
Value = 0.96x
Recall that the initial value is x.
So, the profit is:
Profit = 0.96x - x
Evaluate the difference
Profit = -0.04x
Express as percentage
Profit = -4%x
Negative value represent a percentage lost.
Hence, the net percentage lost is 4%
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