Discussion Assignment: Week 2

Lines can be used to approximate a wide variety of functions; often a function

can be described using many lines.
If a stock price goes from $10 to $12 from January 1st to January 31, from $12
to $9 from February 1st to February 28th, and from $9 to $15 from March 1st to
March 31th is the price change from $10 to $15 a straight line?
Þ When an equation is written to represent price change for each month we
find the below equations.
1. Given:
from jan 1st to jan 31st price changed from 10$ to 12$. So
(x1,y1) : (1, 10) and (x2, y2) : (31, 12) ------- y = mx+b
solution:
Þ m = (y2-x1)  b = y- mx for (x, y): (1, 10)
(x2,-x1) b = 10 - 1/15
m = (12-10) b = 149
(31-1) 15
m = 1/15
so,
Þ y = x + 149 D: x ε W / [1,31]
15
2. Given:
from feb 1st to 28th price changed from 12$ to 9$.
(x1,y1) : (1, 12) and (x2, y2) : (28, 9) ------- y = mx+b
solution:
Þ m = (y2-x1)  b = y- mx for (x, y): (1, 12)
(x2,-x1) b = 12 - (-1/9)
m = (9-12) b = 109/9
(28-1)
Þ m =-1/9
So,
Þ y = -x+109 D: x ε W / [1,28]
9
3. Given:
from march 1st to 31th price changed from 9$ to 15$.
(x1,y1) : (1, 9) and (x2, y2) : (31, 15) ------- y = mx+b
Solution:
Þ m = (y2-x1)  b = y- mx for (x, y): (1, 9)
(x2,-x1) b = 9-1/5
m =(15-9) b = 44/5
(31-1)
Þ m = 1/5
So,
Þ y = x+ 44 D: x ε W / [1,31]
5
It is clear that in each of the three time intervals mentioned there was a
complex daily variation of prices as in an electrocardiogram. But what would
be a simplified solution for a first naive view of the situation?
solution:
While the slope is the same, because the x values from the diferent line
segements change based on the number of days contained in the month, the
domain to represent the full equation will change along with their equation.
Hence:
1. the first equation will remain the same.
Þ y = x + 149 D: x ε W / [1,31]
15

2. for the second line segment, its equaton will change along with its domain
to D: x ε W / [32,59] because the quation continuied from january 31st and
also because on the first of feberuary the price is 12, we have:
b = 140/9
Thus, changing the equation to :
y=-x+140 and D: x ε W / [32,59]
9
3. for the second line segment, its equaton will change along with its domain
to D: x ε W / [60,90], because the equation continuied from march 28th,
which is 59th day and because, also, on the first of march the price is 9,
we have:
b = -3
Thus, changing the equation to :
y=(x/5)-3 and D: x ε W / [60,90]
Would a simple function hold up?
No, but we can use different line segment equations with their respective
domain to represent the price change from jan 1st to the end of march.

What is the simplest function to represent this situation?

Þ f(x) = x + 149 D: x ε W / [1,31]
15
Þ f(x) = -x+140 D: x ε W / [32,59]
9
Þ f(x) = (x/5)-3 D: x ε W / [60,90]

Does your naïve initial and simplified model allow you to predict the behavior
of the stock in the next month?
Þ No

How can I use three “pieces” of lines to describe the price movements from the
beginning of January to the end of March?

Þ f(x) = x + 149 D: x ε W / [1,31]

15
Þ f(x) = -x+140 D: x ε W / [32,59]
9
Þ f(x) = (x/5)-3 D: x ε W / [60,90]

Show the graph for the price movement.

Reference: Abramson, J. (2021). Algebra and trigonometry (2nd ed.). OpenStax, TX: Rice University. Retrieved
from https://openstax.org/details/books/algebra-and-trigonometry-2e