Finite Math and Applied Calculus (6th Edition)

Published by Brooks Cole
ISBN 10: 1133607705
ISBN 13: 978-1-13360-770-0

Chapter 10 - Section 10.4 - Average Rate of Change - Exercises - Page 734: 39

Answer

Sample graph: .

Work Step by Step

Let us say that the volatility in 1991 was $x$ points. From 1991 to 1995, the volatility decreased at an average rate of 0.2 points per year, so it decreased from $x$ to $x- 4\times 0.2 = 1.1$ points. Solving, we get $x=1.9$ points. We plot the points $(1991, 1.9)$ and $(1995, 1.1)$, and join them with a smooth curve. Also, from 1995 to 1999 the volatility increased a total of $4\times 0.3 =1.2$ points to give us $2.3$. Plot the next point, $(1999,2.3)$ and join with the rest of the curve. (The in-between intervals can have all sorts of curves. The presented one is a sample.)
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