<div class = "text-justify">It's with great pleasure I am writing again at the Academy. This piece is been composed to give the summary of the lecture I published last week and I believed many of the participants enjoyed the lecture.</div>


<center>![20211003_114807_0000.png](https://cdn.steemitimages.com/DQmY6SdqBEv259e5tTUCJ5bjyUuDsgJ1wQVcm7t8jHSYGhP/20211003_114807_0000.png)
<sub>Made in Canva</sub></center>

<div class = "text-justify">In the just concluded week, we discussed the topic <b>Crypto Assets Diversification (CAD)</b> which is one of the investment strategies to keep one on the safe side of the investment. Under the topic as regards construction, I discussed <b>Analysis</b> which encompasses fundamental/technical analysis of assets before one chooses to invest in any cryptocurrency asset. We explained that analysis is the fundamental step to take to be satisfied with the assets in question and not to invest blindly.</div>
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<div class = "text-justify">Likewise, we talked about <b>the 1-4 Rule</b> as another strategy used while constructing crypto assets diversification. Using the 1-4 Rule, our available capital (reservoir) is divided into 4 different parts (pools,), and each part is invested into the assets (4) of selection. One of the benefits of CAD is that it mitigates risk on the side of investors and it comes with its other side which is reduced return on investment.</div>
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<div class = "text-justify">Many users were able to deal with <b>CAD</b> properly although a certain percentage failed the real transaction section as some didn't invest while some made an incomplete investment. Everyone's efforts were appreciated just that a certain grade was deducted for contents with no/incomplete transactions.</div>
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<center><h4>Solution to Triangular arbitrage</h4></center>

<div class = "text-justify">I added arbitrage trading as a bonus to the lecture and I will be talking about triangular arbitrage in detail here. Students were given the task to explore triangular arbitrage and how to properly identify a triangular arbitrage opportunity. <b>Observations</b>: Many people creatively explored triangular arbitrage but failed to explain how to properly identify it. Let's see a brief illustration below.</div>
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<div class = "text-justify"><li>The first step is that one should be able to identify a clear difference in <b>cross rate</b> of the 3 assets before embarking on the journey of taking advantage of triangular arbitrage. We would consider 3 assets <b>A, B</b> and <b>C</b> while explaining this. Assuming the cross rates are as follows:</li></div>
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<b>B/A = 0.9, B/C = 1.4, A/C = 1.6</b>

<div class = "text-justify"><li>From the above, the asset I'm starting with is A while I checked for triangular arbitrage opportunity through its cross rates with B and C.</li></div>
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The product of the cross rate of <b>B/A = 0.9 and A/C = 1.6</b> should have a cross rate difference to <b>B/C = 1.4</b>.

Now, <b>0.9 X 1.6 = 1.44</b>

Therefore, <b>B/A.A/C</b> is greater than <b>B/C</b> with <b>0.04</b> difference. And this implies a clear opportunity.

<div class = "text-justify"><li>Now, assuming I'm going into the trade with 2000 units of asset <b>A</b>. Let's see;</li></div>
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1. Using the pair B/A, I sold <b>2000</b> units of A for B and this gives me; <b>0.9 X 2000</b> = <b>1800</b>.

2. Using the B/C, I am selling the B asset for C, then we have; <b>1800/1.4</b> = <b>1285.7</b>.

3. Lastly, I am selling C for the initial asset (A) using A/C; <b>1285.7 X 1.6</b> = <b>2057.12</b>.

<div class = "text-justify"><li>At the end of the process, we have <b>2057.12</b> of A of which we started the process with <b>2000</b> of A. We can see that we now have <b>57.12 A</b> as profit after taking advantage of the triangular arbitrage. See the graphic below for the entire process.</li></div>


<center>![Triangular1.png](https://cdn.steemitimages.com/DQmbAA9ktDJ7PTRxaeDwRRKAgpcR8Rqq1EZTDfR1ZYnU6ya/Triangular1.png)
<sub>Made in Adobe Photoshop</sub></center>

<div class = "text-justify">In a real sense, Triangular Arbitrage doesn't come easily as expressed above, it often requires huge capital and a super-fast computer for execution. <b>Note that</b>: Be sure that you have clearly identified triangular arbitrage before you start the process to avoid risk.</div>
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<center><h4>Statistics</h4></center>

<div class = "text-justify">This section would be used to give the statistics of participation for the Season 4 Week 4 of the Crypto Academy as far as <b>Crypto Assets Diversification (CAD)</b> is concerned. A total of <b>53</b> homework was received and visited timely, below is the performance breakdown of the entries:</div>
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**Category** | **Value**
--------------- | ---------------
Excellent | 19
Very Good | 18
Good | 6
Average | 7
Below Average | 1
Plagiarized Content | 0
Invalid | 2
**Total** | **53**
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<div class = "text-justify"><b>Excellent</b> represents grades within 9 - 10, <b>Very Good</b> for grades within 8 - 8.9, <b>Good</b> for grades within 6 - 7.9, <b>Average</b> for grades within 5 - 5.9, <b>Below Average</b> for grades below 5, <b>Plagiarized</b> are the contents that are found to have been copied from another source without proper reference and <b>Invalid</b> are incomplete articles/Users Powering down/Insufficient SP for the Advanced level. Let's see the distribution on the charts below. </div>


<center>![Week 41.png](https://cdn.steemitimages.com/DQmT9LpBzhmCpDVNqU2kM8VcTKVQQWoYek6eTPHJY4yoPoR/Week%2041.png)</center>


<center>![Week 42.png](https://cdn.steemitimages.com/DQmYHprd7jJ1oXKoDVfnfTMfVfBjtKtFQMc9cWWSHwnjCqK/Week%2042.png)</center>

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<center><h4>Top 3 Articles for the Week</h4></center>

Rank | Author | Article's Link
----------- | ----------- | -----------
1 | @madridbg | [Link](https://steemit.com/hive-108451/@madridbg/steemit-crypto-academy-temporada-4-semana-4-curso-avanzado-diversificacion-de-activos-criptograficos-cad)
2 | @jehoshua-shey | [Link](https://steemit.com/hive-108451/@jehoshua-shey/crypto-assets-diversification-crypto-academy-s4w4-homework-post-for-fredquantum)
3 | @kwadjobonsu | [Link](https://steemit.com/hive-108451/@kwadjobonsu/crypto-asset-diversification-crypto-academy-s4w4-homework-post-for-fredquantum)
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<center><h4>Conclusion</h4></center>

<div class = "text-justify">In conclusion, the overall performance of students for the week is quite great. Nevertheless, proper analysis of the homework task solutions cost a lot of students from making an outstanding article. With this, I'd like to encourage students to be more creative and kindly pay attention to your content structure before submission. Also, use <a href = "https://www.grammarly.com/"> Grammarly</a> to take care of likely grammatical errors. Thanks for participating. </div>

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Cc:-
@steemitblog
@steemcurator01
@steemcurator02