Calculus A volatility index generally measures the extent to which a market unde

Question

Calculus

A volatility index generally measures the extent to which a market undergoes sudden changes in value. The volatility of Market A (as measured by one such index) was decreasing at an average rate of 0.2 points per year during 1991-1995, and was increasing at an average rate of about 0.5 points per year during 1995-1999. In 1995 the volatility of Market A was 1.1. Use this information to give a rough sketch of the volatility of Market A as a function of time, showing its values in 1991 and 1999.

Explanation / Answer

last graph is the correct graph fitting these information. minimum value will be 1.1 iin the year 1995, and then increasing nature. the graph first decreases and then increases,. go for last one. thank you

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