2. Figure 10 tracks the value of an initial $100 investment made in Pfizer in 19

Question

2. Figure 10 tracks the value of an initial $100 investment made in Pfizer in 1944. For each month, the value given is the amount invested in Pfizer at the end of the previous month multiplied by the percentage change during the month. The value of the initial $100 investment is approaching $3 million. $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000- $0 950 1960 1970 1980 1990 2000 2010 Year FIGURE 10 Compounded value of $100 investment made in a. What does the White Space Rule say about b. Would it be appropriate to summarize these Pfizer in 1944 this figure? data using a histogram?

Explanation / Answer

1.White space rule says that if our plot (here the line diagram) is mostly white space, we should improve it by refocusing to pay more importance to the data rather than the white space.here the intervals over the x axis are taken over 10 years,whereas the data changes of investment per month of every year.

So it should be suggestive to use less interval in case of the time,like by 6 months(atleast) to plot the data,then we can see the change more clearly. Also if instead of 0-500,00 we use 0-250,000 or further less interval,the changes would be more visible.

Here in the given data we can hardly conclude any change from the year 1944-1990.

2. Here the data given is continuous in nature. A better method for a continuous variable is to use a histogram.here on the horizontal axis we locate the class boundaries.here the class boundary is ought to be the year intervals. But if plot the above data as bars of histograms , we need to take very less intervals to see the changes. A lot of bars are needed to be drawn in that case (which would make it look cumbersome)and also we won't get the exact change but a relative change.

So here in this case a histogram is not appropriate.

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