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2.Graph the following network: 2 = { , , , , , , , } 2 = { , , , , , , ,

2.Graph the following network:

  • 2 = {,,,,,,,}
  • 2 = {,,,,,,,,,,,,,,,,,,}

Use the network from question 2 to answer the following questions.

i)Suppose a node in the network is infected with a disease that will transmit along an edge with a probability of 0.4. Would we expect the disease to spread throughout this network? Explain.

ii)Now suppose each node in the network represents a bank, and one of the banks declares bankrupty. Bankruptcy will spread to a bank if it shares at least 40 percent of its edges with bankrupt banks. Which bank(s) could be the first to become bankrupt and NOT lead to a financial contagion that would bankrupt the entire network? Explain.

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