Question
Plot the following two points Point 1: Age of home = 20, Appraised Value = $40,000 Point 2: Age of home = 30, Appraised Value
Plot the following two points
Point 1: Age of home = 20, Appraised Value = $40,000
Point 2: Age of home = 30, Appraised Value = $50,000
a. Write the equation of the straight line that passes through the points, predicting value from the age of the home. What is the intercept and slope?
b. If the line you've drawn predicts appraised value exactly, what would be the appraised value for a 25-year-old home?
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An Introduction to the Mathematics of Financial Derivatives
Authors: Ali Hirsa, Salih N. Neftci
3rd edition
012384682X, 978-0123846822
