- Define the relationship between the closing price and net change as \(C_{today} - C_{yesterday} = N\).
- Rearrange the equation to solve for the previous day's price: \(C_{yesterday} = C_{today} - N\).
- Substitute the given values: \(C_{yesterday} = 56.11 - 5.74 = 50.37\).
- Conclude that the price of SFT Legal yesterday was \(\boxed{\$50.37}\).
Explanation
- Analysis of the Stock Data
We are given today's closing price for SFT Legal as \(\$56.11\) and the net change as \(\$5.74\). The net change is defined as the difference between the current day's closing price and the previous day's closing price. Our objective is to find yesterday's closing price.
- Formulating the Equation
Let \(C_{today} = 56.11\) represent today's closing price, \(C_{yesterday}\) represent yesterday's closing price, and \(N\) represent the net change. The relationship is given by the formula:
\[N = C_{today} - C_{yesterday}\]
To find the price yesterday, we rearrange the formula:
\[C_{yesterday} = C_{today} - N\]
- Calculating Yesterday's Price
Now, we substitute the known values into our rearranged equation:
\[C_{yesterday} = 56.11 - 5.74\]
Performing the subtraction:
\[56.11 - 5.74 = 50.37\]
Thus, yesterday's closing price was \(\$50.37\). Comparing this result with the provided options:
A\(\$47.17\)
B\(\$56.11\)
C\(\$50.37\)
D\(\$61.85\)
The calculated value matches option (c).
Examples
Understanding how to interpret stock tables is a fundamental skill in finance. When you see a "net change" value, it helps you track the performance of an investment over time. For example, if you are analyzing the growth of a company like SFT Legal, knowing the previous day's price allows you to calculate the percentage growth or loss for the day, which is essential for making informed investment decisions. This simple arithmetic helps traders reconstruct price history from daily reports.