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: 40

Answer

Sample graph: .

Work Step by Step

From 1992 to 1995, the volatility had an average rate of change of 0. So, the value in 1992 equals the one in 1995. Plot $(1992,1.1)$ and $(1995, 1.1)$ and join with a smooth curve. The connection does not have to be a straight line segment (we do not know how the index behaved in-between the borders of the period). From 1995 to 1998, the volatility increased from $1.1 $to $1.1+ 3\times 0.2 = 1.7$ points. Plot $(1.998,1.7)$ and join with a smooth curve.
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