CAHSEE Math 2.2 Statistics, Data, and Probability I

Statistics, Data, and Probability I: Drill Set 2, Problem 2. If this trend continues, what will be the price in week 7?

CAHSEE MathStatistics, Data, and Probability I
FunctionsInterpret expressions for functions
LanguageEnglish Language
StatisticsCharts, Graphs, and Tables
Statistics and ProbabilityInterpret linear models
Statistics, Data Analysis, and Probability 6Data sets

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.