Questions about VXX Exchange T r a d e (1 Notes Please visit the website https :llipathetn .barclays / details .app ;instrunentId =341408 and familiarize yourself with the Barclays iPath VIZ Futures exchange traded note (ETN ), which trades under the symbol VXX . The site includes links to pdf files containing complete documenta tion. You will need to read at least some of the prospectus to understand the details of the fund's construction You can get the ETN history from http :llfinance .yahoo .com/q/hp?s=VXX1Historical +Prices A minor detail is that the original VXX contract traded from January 2009 through January 2019 , when it matured . In January 2018 , Barclays created a second one which traded under the symbol YXXB .In April 2019 they switched its symbol to VXX . 0n the Canvas site , there is another Ya hoo spreadsheet for the original note _ You should paste the two data series together (adjusting for splits ), and treat it as a single security from 2009 until now . Prepare a report assessing the risk and reward characteristics of this instrument . In particular , your report should address the following four questions . Question 1. Briey summarize how the ETN works .What does Barclays do with the money in the fund '3' Is the fund levered? Is there an arbitrage relationship that links the market value of VXX to the level of the YIX index? . Question 2. Plot the cumulative returns to date on VXX. From the available historical data, provide an estimate of the market price of VXX riskl Make sure to annualize the numerator and denominator appropriately. We can view this as an estimate of the market price of VIX risk if the two series are tightly linked.2 What is the correlation between daily VXX returns and the daily changes of the (log) VIX index ? . Question 3. Under the type of stochastic volatility model we have been using, it is not hard to show that the market price of VIX risk is the same as the market price of actuaBSlP 500 volatility risk. So we can interpret your VXX risk price estimates as that quantity as well. The next topic to investigate is whether there is any evidence for predictable changes in this price of volatility risk. This is equivalent to asking whether there are any good timing strategies for trading VXX . Bin the data by calendar quarter , and reestimate the VXX Sharpe ratio in each quarter . Plot the time serie.s . Do you see evidence of any patterns in the changes , or does it look like noise ? Is there any statistical evidence that the price of volatility risk itself is associated with For an overnight riskless rate, you can use the Federal Funds rate, available fromhttps \"(fired -5t101-lifed org fseries fEFFll . 3Datu on VIX can be downloaded from https : {few . oboe . com {tradab1e_product3 lvix fwieristorical_data f