(MAY21) Math AA HL IA 고득점

I. Introduction

My cousin is a stewardess of an airline company called Korean Air. She suggested my father to invest in Korean Air’s stocks before the outbreak of Coronavirus Disease- 19 (COVID-19) because she thought its stocks would go up. However, since people tend to travel less not to get infected from COVID-19, Korean Air’s number of flights and profit have decreased by 95% and 44% respectively compared to last year (ChosunBiz). Consequently, the company’s stock value has decreased by 44% (Yonhap Infomax). As a result, my father lost a large amount of money, which shocked me a lot. This motivated me to find a way not to lose money from investment in stock market. In order not to lose money, I must be able to predict the future stock market and sell the stocks if the stock value is predicted to decrease.

Thus, my aims in this investigation are to use mathematical methods to a) analyze the current stock market and b) hopefully predict the future stock market of Korean Air. I am going to achieve these aims by using calculus and statistics. Differential calculus and Lagrange interpolation function will help me to analyse the trends of the current stock market. Statistics and integral calculus will help me to find the probability of positive daily stock returns and negative daily stock returns, hopefully allowing me to predict if the stock value will increase or decrease. By reading this exploration, IB Mathematics students can understand how different mathematical theories can be applied to the real-life situations such as stock markets.

II. Background information

As my investigation is about analysis and prediction of Korean Air’s stock market, I need to firstly understand general background information about stock markets. People can purchase, sell and trade stocks at stock markets (Amadeo). Stocks allow them to have a share of a public company (Amadeo). Stock values usually indicate the investors’ viewpoint of the company’s earnings in the future (Amadeo). Traders who think the company will earn more in the future will make the stock value go up (Amadeo)…