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julia-pushkina [17]
3 years ago
5

It is theorized that the price per share of a stock is inversely proportional to the prime​ (interest) rate. In January​ 2010, t

he price per share of a certain​ company's stock was ​$193.04 and the prime rate was 2.75​%. The prime rate rose to 5.50​% in March 2010. What was the price per share in March 2010 if the assumption of inverse proportionality is​ correct?
Business
1 answer:
Zanzabum3 years ago
3 0

Answer:

price per share in March is $96

Explanation:

given data

January price per share = ​$193.04

January prime rate = 2.75%

march prime rate = 5.50​%

to find out

What was the price per share in March

solution

we know that here price is proportional to prime rate

Price ∝ \frac{1}{rate}   ........1

so price = k ×  \frac{1}{rate}      ...............2

k is constant here

so put all value for january

193.04 = k ×  \frac{1}{2.74%}

k = 5.28

so for  march price per share will be by equation 2

price = 5.28 ×  \frac{1}{5.50%}

price = 96

so  price per share in March is $96

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