THE NEXT QUESTIONS ARE BASED ON THE FOLLOWING INFORMATION

question 304

Essay

THE NEXT QUESTIONS ARE BASED ON THE FOLLOWING INFORMATION:
A researcher is interested in examining how the net wealth of individuals changes over the course of their lifetimes.She has collected the following data regarding the age X,in years,and net worth Y,measured in thousands of dollars,of 12 individuals in the form of (x,y)pairs: (24,153),(34,201),(38,297),(83,139),(77,167),(32,123),(71,247),(49,263),(54,352),(35,321),(65,453),and (30,54).
-Prepare a scatter plot of this data.

---

Definitions:

Pricing Model

A theoretical approach used to determine the price of a financial instrument or the valuation of a company.

Risk-Free Rate

The risk-free rate is the theoretical rate of return of an investment with zero risk, serving as a benchmark for measuring financial instruments' risk.

Arbitrage Opportunities

The chance to buy an asset at a low price in one market and simultaneously sell it at a higher price in another market, earning a risk-free profit.

Expected Returns

The average return an investor anticipates on an investment, based on historical data, projected performance, and market analysis.