• Interpolation is a simple mathematical technique that investors use to estimate the unknown price or potential return of a security or asset using corresponding known values.

  • By using a constant trend across a set of data points, investors can estimate unknown values and plot those values on charts that show the movement of a stock’s price over time.
  • One criticism of the use of interpolation in investment analysis is that it lacks precision and does not always accurately reflect the volatility of publicly traded stocks.