Question
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The new value of Stock \( S \) is modelled by the equation: \[ s_{2}:[0, \infty) \rightarrow \mathbb{R}, s_{2}(t)=a t+3 \] Where, \( a \in \mathbb{R} \). b. Determine all possible value(s) of \( a \)

Ask by Rodriguez Hobbs. in Australia
Jan 25,2025

Real Tutor Solution

Tutor-Verified Answer

Answer

\( a \) can be any real number.

Solution

To determine all possible values of \( a \) in the equation \( s_{2}(t) = a t + 3 \), we need to analyze the function and its implications. 1. **Understanding the function**: The function \( s_{2}(t) \) is a linear function of \( t \) with a slope of \( a \) and a y-intercept of 3. The domain of \( t \) is from 0 to infinity, which means we are interested in the behavior of the stock value as time progresses. 2. **Behavior of the function**: - If \( a > 0 \): The stock value \( s_{2}(t) \) will increase as \( t \) increases, indicating a positive growth in stock value over time. - If \( a = 0 \): The stock value \( s_{2}(t) \) will remain constant at 3, meaning there is no growth or decline. - If \( a < 0 \): The stock value \( s_{2}(t) \) will decrease as \( t \) increases, indicating a decline in stock value over time. 3. **Possible values of \( a \)**: Since \( a \) can take any real number value, the possible values of \( a \) are: \[ a \in \mathbb{R} \] Thus, the conclusion is that \( a \) can be any real number, which means there are no restrictions on the value of \( a \).

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Bonus Knowledge

To ensure that the function \( s_2(t) = at + 3 \) represents a valid stock value, we must take into consideration that stock prices are generally non-negative. This implies: 1. For \( t = 0 \): \[ s_2(0) = a \cdot 0 + 3 = 3 \] This is already non-negative. 2. For \( t > 0 \): We have \( s_2(t) = at + 3 \). For this to remain non-negative for all \( t \geq 0 \), the slope \( a \) must be such that \( at + 3 \geq 0 \). If \( a < 0 \), as \( t \) increases, \( at \) would become more negative, and there will be a point where \( s_2(t) < 0 \). This scenario violates the condition of non-negativity. Thus, \( a \) must be non-negative. Therefore, the possible value(s) of \( a \) are: \[ a \geq 0 \]

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