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Statistics LibreTexts

16.5: Statistical Literacy

  • Page ID
    2184
  • Skills to Develop

    • Stock Appreciation

    Many financial web pages give you the option of using a linear or a logarithmic \(Y\)-axis. An example from Google Finance is shown below.

    stock_increase.jpg

    Figure \(\PageIndex{1}\): A web page from Google Finance

    Example  \(\PageIndex{1}\): what do you think?

    To get a straight line with the linear option chosen, the price would have to go up the same amount every time period. What would result in a straight line with the logarithmic option chosen?

    Solution

    The price would have to go up the same proportion every time period. For example, go up \(0.1\%\) every day.

    Contributor

    • Online Statistics Education: A Multimedia Course of Study (http://onlinestatbook.com/). Project Leader: David M. Lane, Rice University.