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CAHSEE Math 2.2 Statistics, Data, and Probability I 182 Views
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Description:
Statistics, Data, and Probability I: Drill Set 2, Problem 2. If this trend continues, what will be the price in week 7?
Transcript
- 00:04
Here's a boring, unshmoopy question you'll find on an exam somewhere in your life...
- 00:09
The table below shows the increase in price per share of a certain company's stock over
- 00:13
a period of 4 weeks. If this trend continues, what will be the price in week 7?
- 00:18
And here are the potential answers:
- 00:26
So ... what's this question really asking other than, "can you read a table?"
Full Transcript
- 00:31
Uh, no... this table. Right. Whenever we are asked to make predictions,
- 00:35
it is likely that we are being asked to find a PATTERN.
- 00:39
And in this case, they give us the pattern -- it's that the share price increased each week.
- 00:45
So our first thought, especially for you future stock brokers or investors out there,
- 00:49
should be "by how much did it increase?"
- 00:51
That is, the problem GIVES us that the stock
- 00:54
INCREASED. So let's first just figure out what it increased in week one.
- 01:01
We take $14.40 and subtract $12.15. We get two bucks and two bits.
- 01:07
Or... a fancy way of saying... two bucks and a quarter.
- 01:10
Let's do it for week 2 now and we get $16.65
- 01:14
minus $14.40 and yeah -- that's $2.25. Great.
- 01:18
Since the stock increased by the SAME amount, we know we have a CONSTANT trend.
- 01:24
If the stock had gone to any other number,
- 01:26
the answer would have been much harder to figure out.
- 01:28
But the question is asking us to carry this pattern out to the 7th iteration.
- 01:33
We are already at week 4 with a stock trading at $18.90 a share.
- 01:37
Now we get 3 more weeks of wealth creation.
- 01:40
We can spend some of that dough on Shmoop you know!
- 01:42
Always a wonderful gift for the little brother....
- 01:46
We can get there in 2 ways, the easiest of which is to just multiply $2.25 by 3...
- 01:52
...because there are 3 weeks to go from week 4 to week 7... and we get $6.75.
- 01:57
We'd add that to the last trade of $18.90 and get $25.65.
- 02:04
Yep, it's there on the answer choice menu as C.
- 02:07
If you are allergic to multiplication you could have just iterated 3 times and had:
- 02:11
Week 5... $18.90 + $2.25 Week 6... $21.15 + $2.25
- 02:17
And Week 7... $23.40 + $2.25 gets you $25.65
- 02:22
Either way, you arrive at the promised land of high investment returns, wealth, luxury...
- 02:27
...and the answer being C.
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