Concept explainers
a)
To find: The month in which both A and L bought the stock.
Both A and L bought the stock in March.
Given Information:
The graph shown in figure 1.
Figure 1
Explanation:
There is an increase in the price from
Therefore, both A and L would have bought the stock in March.
b)
To find: The approximate price at which A and L bought the stock.
Both A and L bought the stock at the price of
Given Information:
The graph shown in figure 1.
Figure 1
Explanation:
From the graph in figure 1, it follows that in March the stock price was
Therefore, both A and L bought the stock at the price of
c)
To find: When did A sell the stock.
A sold the stock in June.
Given Information:
According the A’s rule, if the stock doesn’t perform well for consecutive three months, then the person will sell the stock.
Explanation:
From the graph, it follows that from March, the prices of the stock fell continuously for three months.
Therefore, A sold the stock in June.
d)
To find: How much A loses on the stock.
A lose
Given Information:
A bought 100 shares at the price
Explanation:
A sold the shares at
A bought 100 shares at the price
The amount he lost is
Therefore, A’s total loss is
e)
To explain: Why Person L’s strategy was better for this particular stock and year over Person A’s strategy.
Given Information:
The graph shown in figure 1. Also, according the A’s rule, if the stock doesn’t perform well for consecutive three months, then the Person A will sell the stock, and according to Person L’s rule if the stock doesn’t perform well since its purchase, then Person L will sell the stock in December.
Explanation:
A sold his stock in March and since then the price of the stock is started rising again. At the end of the year, it rises to
Now, L sold her stock at the end of the year.
So, she got
She invested
Thus, she earned a profit of
Since L earned a profit of
f)
To sketch: A 12-month graph of a stock’s performance that would favor A’s strategy over L’s.
Given Information:
According the A’s rule, if the stock doesn’t perform well for consecutive three months, then the Person A will sell the stock, and according to Person L’s rule if the stock has failed to perform well since its purchase, then Person L will sell the stock in December.
Graph:
Person A’s strategy would be favoured if any graph decrease steadily from March to December.
The graph in figure 2 shows that A’s strategy is better than L’s.
Figure 2
In this case, L sold her stock at the end of the year.
So, she got
A sold his stock in July at
Thus, A earned more than L.
Chapter 1 Solutions
PRECALCULUS:GRAPH...-NASTA ED.(FLORIDA)
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