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asambeis [7]
3 years ago
13

A mutual fund rating agency ranks a​ fund's performance by using one to five stars. A​ one-star mutual fund is in the bottom​ 20

% of its investment​ class; a​ five-star mutual fund is in the top​ 20% of its investment class. Interpret the meaning of a​ four-star mutual fund.
Mathematics
1 answer:
Paladinen [302]3 years ago
8 0

Each star has a 20% difference.

A four star rating would be above the bottom 60% ( 1, 2 and 3 stars) but be below the top 20%. (5 stars).

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In linear models there is a constant additve rate of change. For example, in the equation y = mx + b, m is the constanta additivie rate of change.


In exponential models there is a constant multiplicative rate of change.


The function of the graph seems of the exponential type, so we can expect a constant multiplicative exponential rate.


We can test that using several pair of points.


The multiplicative rate of change is calcualted in this way:

 [f(a) / f(b) ] / (a - b)

Use the points given in the graph: (2, 12.5) , (1, 5) , (0, 2) , (-1, 0.8)

[12.5 / 5] / (2 - 1) = 2.5


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Then, do doubt, the answer is 2.5





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See attached image

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See image attached to find the vertex drawn as a red point, and the axis of symmetry as an orange vertical line passing through it.

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