Hello, Hope this email finds you well. I have an important assignment worth 100% of my grade that I really need your help with. Kindly find below the set of questions: Assignment Answer all parts of the following question. Marks allocated to each part in square brackets. Data source for Questions 2 through 5 needs to be the same, and has to be mentioned at the beginning of your report 1) Many people find it difficult to understand blockchain because it requires the coordination of many components for it to function, and it’s hard to see the full picture until all the individual components are fully understood. In brief, please explain the following from a technological standpoint: What are the basics of interaction of cryptography and economics? What is your fundamental understanding of blockchain technology? [10] 2) What were the key events for Cryptocurrencies from January 31, 2018 till January 31, 2019? Create and present a graphical timeline with the key dates and the key events. What was the reaction in Bitcoin trading (BTC) on these dates? Did the BTC price go up or down? By how much? What was the mean return on key events dates? What was the median return? What was the standard deviation? Plot the distribution of the daily percentage change on key events dates. Create a variable that takes the value 0 on days without key events and 1 on days with key events. Calculate the correlation matrix on key events dates and non-key events dates between the behaviour of Bitcoin, Ethereum (ETH), Ripple (XRP) and Nasdaq. Perform a regression analysis between the previous variables and briefly comment on the results. [25] 3) Create a function called assess_portfolio() that takes as input an asset allocation of a cryptocurrency asset portfolio and computes important statistics about the portfolio. You are given the following inputs for analysing a portfolio: A date range to select the historical data to use (specified by a start and end date). You should consider performance from close of the start date to close of the end date on a daily basis, if you choose intraday data then please use daily median price. Symbols for each cryptocurrency asset (e.g., BTC, ETH, XRP, LTC). Portfolio allocations for each asset at the beginning of the simulation (e.g., 0.2, 0.3, 0.4, 0.1) which should sum to 1.0. Total starting value of the portfolio (e.g. $1,000,000) Your goal is to create a programme to compute and visualise the daily portfolio value over the given date range within a sample period from: February 15, 2017 to February 15, 2019, and then the following statistics for the overall portfolio: Cumulative return for the chosen date range from the sample period Plot the average period return (if sampling frequency == 252 trading days then this is average daily return for the portfolio) Calculate the standard deviation of daily returns Calculate the annualised Sharpe ratio of the daily returns of the portfolio, given daily risk-free rate (usually average of overnight LIBOR rate), and yearly sampling frequency (usually 252 days, the number of trading days in a year) Plot the moving historical volatility with a minimum rolling period of 30 days (i.e. moving historical standard deviation of the log returns) Ending value of the portfolio Are these returns all positive? Or not? What is your explanation for what you observe? [25] 4) Create an event study profile of a specific market event in the Cryptocurrency market, and compare its impact on two relatively liquid cryptocurrencies. The event is defined as when the daily median price / daily close price of the cryptocurrency is 10% lower than the previous day. Evaluate this event for the time period: February 15, 2017 to February 15, 2019. Create and describe your own trading strategy based on the findings, to include writing the code for your trading strategy and execution of the strategy with relevant visual output in plots for this sample period. [20] 5) Now that y…
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