[maerF0x0]

> Each year is cumulative/compounding. At the end of the three years, your investment is down to 0.909 * 0.88 * 0.777 ~= 0.6215, so you've actually lost 48%, not 43%.

You're correct on the idea but wrong on your math.

1-.6215 = 0.3785 ... Successive positive compounding leads to compounded growth, but successive negatives lead to diminished losses (because in year 2 you're only losing 12% of 90.9% , not 12% of 100%)

[lodi]

My bad, I messed up the mental arithmetic on 1-0.62. Right, 38%.