Volatility Drag

The problem
year 1: +50% · year 2: −50%+50%Year 1→−50%Year 2=?average return = 0 · what's the compound return?

You buy a stock for $100. In year 1 it gains +50%. In year 2 it loses −50%.

The arithmetic average return is 0%0\% per year.

How much money do you have at the end of year 2?