Changing Stock Prices

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From my understanding, the rate of change has to do with functions. When an individual is asked to find the rate of change; they are being asked to find the slope of the Secant line that’s between two points. The way the average rate of change is calculated is by finding two points of a line and figuring out the slope. Which would be Slope = y/x

An Example would be the problem given in the Desmos activity. Which was to calculate the average rate of change of a company (of our choice) stock’s price over the month of August (via. Google search). I choice the company eBay.

In order to find the average rate of change in this question. We must identify what the “x” and “y” represent in the google chart graph. Which is the X-axis equals the price of the eBay stock and the Y-axis represents the date in which the stock was priced. Then we pick the two points needed to answer the question. Which would be the starting price value for eBay stock and the end price value of eBay stock for the month of Agust. These points are (31.25,1) and (32.16,31). These two points will form a secant line (a secant line is a line formed after distinguishing two points in a graph).  Now the formula to find the rate of change in this graph is slope = Y2-Y1/X2-X1. Which was would look like this when the points are plugged in slope = 31-1/32.16-31.25. Next step is to simplify, giving me 29/0.9=32.22… The answer for this Desmos activity is the average cost rate of change for eBay stock in Agust is $32.22. Could the average rate of change be beneficial to estimating when is a good time to buy stock or estimating anything in general for future interest?

 

 

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2 Comments Add yours

  1. I do think that the average rate of change could be beneficial to tell someone what is a good time to buy a stock. I say this because if in August the average cost rate of change for eBay was $32.22 then it would be a smart move for someone looking to buy a stock to earn money from that and potentially have it increase. Im not too sure its just my opinion. But, I thought that was a great job you did on this assignment.

    Liked by 1 person

  2. Dr. Fisher says:

    This was an excellent description of the average rate of change and how to convert the information in the Google graph into x’s and y’s. Nice work!

    Like

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