PREDICTING STOCK VALUES In the Career Link earlier in the chapter, you investigated a graphical model used to predict stock values for a new stock. A brand new stock is also called an initial public offering, or IPO. Remember that, in this model, the period immediately after the stock is issued offers excess returns on the stock-that is, the stock is selling for more than it is really worth. One such model for a class of Internet IPOs predicts the percent overvaluation of a stock as a function of time as R (() = 250 (7, (2.718jar ). Where R (0) is the overvaluation in percent and / is the bos agbolwonal time in months after the initial issue. gobag (algor) A. Use the information provided by the first derivative, second derivative, and asymptotes to prepare advice for clients as to when they should expect a signal to prepare to buy or sell (inflection point), the exact time when they should buy or sell (local maximum and minimum), and any false signals prior to a horizontal asymptote. Explain your reasoning. B. Make a table chart for intervals of increase and decrease for the stocks C. Make a table chart for intervals of concavity. D. Make an individual sketch of the given function without using technology as well its first derivative and second derivative. Observation/.Conversation Unit 2 Project 1 1. How do you determine the local extremes of the given curve? Explain? 2. Explain what is Point Of Inflection? 3. How do you know that the given curve is increasing and decreasing graphically and algebraically? Page Q +PREDICTING STOCK VALUES RUBRIC Categories Level 4 Level 3 Level 2 Level 1 8-10 7-7.5 6-6.5 5-5.5 Demonstrates a Demonstrates an Demonstrates a Demonstrates Knowledge and thorough understanding of partial little Understanding understanding of the main understanding of | understanding of (10pts) the main concepts concepts of the main the main concepts of Curve Curve sketching concepts of of Curve sketching Curve sketching sketching Very capably and Performs With some Uses and Thinking and independently algorithms assistance, performs simple Inquiry selects the most accurately and is performs algorithms with (10pts) efficient algorithm usually accurate algorithms with some accuracy and solutions are for first and some accuracy present Assistance accurate for first second present for first is usually required and second derivative and second for first and derivative derivative second derivative Independently Applies the Some Often forgets the applies the steps steps of a effectiveness is steps in a Communication required with a problem and is evident when problem, some (10pts) very high degree usually accurate following and accuracy noted of accuracy. (85-89% applying the some of the (90-100%) steps of a time(Below 75%) No errors problem (75- 84% Thorough analysis Analysis of the Analyzes the Very little of the problem problem is problem with evidence of Application with accurate evident, some success, analysis. Some (10pts) solutions. considerable accuracy needs educated guesses. accuracy. to improve. Accuracy is weak