It's probably a super simple question but I could not find an answer to this anywhere..
So we know that if IV increased by 100%, it takes 50% decrease of FV to return back to the IV. However, if IV increased by 35%, it takes 26% decrease of FV to revert to the IV and so on.
I am looking for a function that describe this relationship.
I hope it makes sense...Thank you!
Note $p$ percentage in first operation ($p=100$ in your first example).
$y = x * (1+ \frac {p}{100} )$ : this is the first operation.
So $x = y \times \dfrac{1}{1+ \frac {p}{100}}$
This factor $\dfrac{1}{1+ \frac {p}{100}}$ , you want to see it as : $1 + \frac{q}{100}$ ( with q negative)
$\dfrac{1}{1+ \frac {p}{100}} = 1 + \frac{q}{100}$
$\frac{q}{100} = \dfrac{1}{1+ \frac {p}{100}} -1 = \dfrac {-\frac{p}{100}}{1+ \frac {p}{100}}$
$q = \dfrac { - p}{1+ \frac {p}{100}}$