Question
The new value of Stock
is modelled by the equation:
Where,
.
b. Determine all possible value(s) of
b. Determine all possible value(s) of
Ask by Rodriguez Hobbs. in Australia
Jan 25,2025
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To ensure that the function
represents a valid stock value, we must take into consideration that stock prices are generally non-negative. This implies:
-
For
: This is already non-negative. -
For
:
We have. For this to remain non-negative for all , the slope must be such that .
If
, as
increases,
would become more negative, and there will be a point where
. This scenario violates the condition of non-negativity. Thus,
must be non-negative.
Therefore, the possible value(s) of
are: