If 1 lac investment in shares rises by 50% (first year) and then drops by 50% (second year), what will be the return on investment? Common answer:  Zero 1 Lac. First year return +50%, second year return -50% average return 0%. Correct answer is loss of 25% How? 1 Lac becomes 1.5 lacs with 50% rise. 1.5 Lacs becomes 75 Thousand with 50% fall. Following is the picture to show why is it difficult to recover from losses. Some investors…