An investor based in USA collects currencies around the world. The investor has a stock of...

 

Transcribed Image Text:

An investor based in USA collects currencies around the world. The investor has a stock of several currencies. Of particular interest are Euro, Canadian Dollars and Bitcoin. Answer the questions below by preparing a professional looking report. Do not forget to write your name and a creative title on your report Go to finance.yahoo.com. At the search bar on top type EURO, Bitcoin and Canadian Dollar one at a time. Pick EUR/USD (EURUSD=X), Bitcoin USD (BTC-USD), Canadian Dollar Futures, Mar-202 (6C=F) if you see multiple options. Then scroll down and pick 'History Data'. On the choices, choose Frequency: 'Weekly' and Time Period: '1 year' (1Y). Click the blue Apply button and the download icon underneath. This will download a .csv format Excel file. Open this file in Excel. You will see that this file has 7 columns. We are interested only in the 'date' and the 'close' columns. These indicate at what value the currency closed the day on each Monday within the past year. The value is indicated in US Dollars. Inside Excel: Print a graph of how each currency changed within the last year Part3: (40 pts) Decision making to sell The investor decided to sell a combination of his/her collected Euro, Canadian Dollar and Bitcoin currencies. In exchange, (s)he will receive US dollars. However there are fair trade limitations in North America. According to these limitations, you can only make a single transaction daily. In that transaction, the limitation for these 3 currencies are as follows. You can sell at most 10 Bitcoins a day You can sell at most 500 Euros a day You can sell at most 1000 Canadian Dollars a day The Canadian dollars to sell must be less than or equal to Euros to sell Altogether, you can sell at most a total number of 1500 currencies a) Assuming that the closing currency rates of Feb 15th 2021 are valid when the investor performs the selling transaction, how many Euros, Canadian dollars and Bitcoins should the investor sell to maximize his/her profit in terms of US dollars? b) Define your decision variables, the objective function, constraints and interpret the result. c) What is the revenue in US dollars from this transaction? d) If the investor wants to write to his/her congress representative to place a new policy to increase the bounds of the fair trade by a single unit in one of these 3 currencies, which currency (s) he should choose? Justify your answer with evidence. An investor based in USA collects currencies around the world. The investor has a stock of several currencies. Of particular interest are Euro, Canadian Dollars and Bitcoin. Answer the questions below by preparing a professional looking report. Do not forget to write your name and a creative title on your report Go to finance.yahoo.com. At the search bar on top type EURO, Bitcoin and Canadian Dollar one at a time. Pick EUR/USD (EURUSD=X), Bitcoin USD (BTC-USD), Canadian Dollar Futures, Mar-202 (6C=F) if you see multiple options. Then scroll down and pick 'History Data'. On the choices, choose Frequency: 'Weekly' and Time Period: '1 year' (1Y). Click the blue Apply button and the download icon underneath. This will download a .csv format Excel file. Open this file in Excel. You will see that this file has 7 columns. We are interested only in the 'date' and the 'close' columns. These indicate at what value the currency closed the day on each Monday within the past year. The value is indicated in US Dollars. Inside Excel: Print a graph of how each currency changed within the last year Part3: (40 pts) Decision making to sell The investor decided to sell a combination of his/her collected Euro, Canadian Dollar and Bitcoin currencies. In exchange, (s)he will receive US dollars. However there are fair trade limitations in North America. According to these limitations, you can only make a single transaction daily. In that transaction, the limitation for these 3 currencies are as follows. You can sell at most 10 Bitcoins a day You can sell at most 500 Euros a day You can sell at most 1000 Canadian Dollars a day The Canadian dollars to sell must be less than or equal to Euros to sell Altogether, you can sell at most a total number of 1500 currencies a) Assuming that the closing currency rates of Feb 15th 2021 are valid when the investor performs the selling transaction, how many Euros, Canadian dollars and Bitcoins should the investor sell to maximize his/her profit in terms of US dollars? b) Define your decision variables, the objective function, constraints and interpret the result. c) What is the revenue in US dollars from this transaction? d) If the investor wants to write to his/her congress representative to place a new policy to increase the bounds of the fair trade by a single unit in one of these 3 currencies, which currency (s) he should choose? Justify your answer with evidence.

Answer rating: 100% (QA)

a To solve this problem we can use linear programming Lets define the decision variables x1 Euros to ... View the full answer