Please Indicate

  • Who you collaborated with. If no one, please indicate so: Maddie Maloney
  • Approximately how much time did you spend on this problem set: 40 minutes
  • What, if anything, gave you the most trouble: none

Question 1: Bitcoin and Gold

a)

Your boss wants to know: “You took Intro to Statistical and Data Sciences right? Give me an executive summary of trends in these two forms of currency.”

Overall, Bitcoin has an upward trend and gold has a downward trend; however, gold remained at a higher value than Bitcoin from 2013 through 2015.

Your boss wants to know: “So we got an investor who has no stomach for volatility in currency prices; they like a nice stable currency to park their money in and not worry about it. What should they invest in?”

Bitcoin is overall more volatile than gold and remains at a lower price than gold over time. When Bitcoin loses or gains value, it loses or gains a much higher percentage of its value than gold does. For stability, your investor should invest in gold.

Your boss wants to know: “What day did bitcoin lose the most value in one day? What was a possible cause?”

December 6, 2013 A man purchased a $103,000.00 Tesla with Bitcoin a few days before its value tanked. Bitcoin’s value isn’t linked to anything except supply and demand, so Bitcoin loses value when more people sell Bitcoins. It also has a very small market, so it takes smaller events to affect its value.

Sources: http://money.cnn.com/2013/12/06/autos/tesla-bitcoin/ https://support.coinbase.com/customer/portal/articles/1834921-why-does-bitcoin-change-value-why-is-the-price-so-volatile-

Question 2: Cheese and Milk Production

Imagine you are working for the US Department of Agriculture. You want to compare milk and cheese production in the United States since 1925 using the following data:

a)

Between cheese and milk, relatively speaking, which agricultural good has seen the bigger overall increases in production?

Cheese has seen the bigger overall increase in production. The relative difference between cheese production levels in 1925 compared to 2014 is much greater than the relative difference in milk production values. The percent difference in cheese production is 2185% compared to milk’s 127.2%. The scale of the graphs shows that cheese jumped more degrees of magnitude than milk did.