## 49thFriday Fun Session – 2nd Feb 2018

Negative Cycle can be identified by looking at the diagonals of the dist[][] matrix generated by Floyd-Warshall algorithm. After all, diagonal dist[2][2] value is smaller than 0 means, a path starting from 2 and ending at 2 results in a negative cycle – an arbitrage exists.

However, we are asked to incrementally compute the same, at cost of O(n2) for each new vertex.

Floyd-Warshall algorithm takes O(n3) time to compute All-Pairs Shortest Path (APSP), where n is the number of vertices. However, given that it already computed APSP for n nodes, when (n+1)th node arrives, it can reuse the existing result and extend APSP to accommodate the new node incrementally at a cost of O(n2).

This is the solution for JLTI Code Jam – Jan 2018.

### Converting Rates

If USD to SGD rate is r1 and SGD to GBP rate is r2, to get the rate from USD to GBP, we multiply the two rates and get the new rate that is r1*r2. Our target is to maximize rate, that is maximizing r1*r2.

In paths algorithm, we talk about minimizing path cost (sum). Hence maximizing multiplication of rates (r1*r2) would translate into minimizing 1/(r1*r2) => log (1/(r1*r2))  => log (r1*r2) -1 => – log r1 – log r2 => (–log r1) + (–log r2) => sum of (–log r1) and (–log r2). Rate r1 should be converted into – log r1 and that is what we need to use in this algorithm as edge weight.

While giving output, say the best rate from the solution, the rate as used in the dist[][] matrix should be multiplied by -1 first and then raised to the bth power, where b is the base (say one of 2, 10 etc.) of the log as used earlier.

### Visualizing Floyd-Warshall

We have seen the DP algorithm that Floyd-Warshall deploys to compute APSP. Let us visualize to some extent as to how it is done for 4 vertices.

#### What Cells Are Used to Optimize

The computation will be done using k = 1 to 4, in the following order – starting with cell 1-1, 1-2, . . . . .2-1, 2-2, …….3-1, ……. 4-3, 4-4.

At first, using k = 1.

Let us see how the paths are improving using the following two examples.

dist[2][3] = min (dist[2][3],  dist[2][1] + dist[1][3])

and dist[3][4] = min (dist[3][4],  dist[3][1] + dist[1][4])

We see that for k = 1, all paths are optimized using paths from 1st (kth) row and 1st (kth) column.

#### Kth Row and Column do not Change

What about paths on kth row and kth column?

dist[1][2] = min(dist[1][2], dist[1][1] + dist[1][2]) – well, there is no point in updating dist[1][2] by adding something more to it.

So we see, at a certain kth iteration, kth row and kth column used to update the rest of the paths while they themselves are not changed.

At k = 1

At k = 2

At k = 3

At k = 4

### Consider Only 3X3 Matrix Was Computed

Now assume that we did not consider that we had 4 vertices. Rather we considered that we had 3 vertices and completed APSP computations for all paths in the 3X3 matrix. We ignored the 4th row and column altogether.

So we have APSP computed for the following matrix using k = 1, 2 and 3.

Let’s say, 4th vertex arrives now. First, we can compare the computations used for the above 3X3 matrix with the same for the 4X4 matrix as shown earlier and find out what all computations need to be done now to extend this 3X3 matrix to 4X4 matrix to accommodate the new 4th vertex.

We will find that at first we have to optimize the 4th row and column using k = 1, 2 and 3. Let us do that.

Note that at this point, 4th row and column are not used to optimize paths for the older 3X3 matrix. So now that we have the 4th row and column optimized using k = 1, 2 and 3, we have to optimize that 3X3 matrix using k = 4.

This way, we don’t miss out any computation had we considered all the 4 vertices at one go. And thus we are done with optimizing all the paths in the 4X4 matrix.

### Code

```dist[][] //APSP matrix, already computed for n-1 vertices

p[][] //predecessor matrix, already computed for n-1 vertices

dist[n][] = ∞

dist[][n] = ∞

dist[n][n] = 0

for each edge (i, n)

dist[i][n] = weight(i, n)

p[i][n] = n

for each edge (n, i)

dist[n][i] = weight(n, i)

p[n][i] = i

for k = 1 to n-1

for i = 1 to n-1

if dist[i][n] > dist[i][k] + dist[k][n]

dist[i][n] = dist[i][k] + dist[k][n]

p[i][n] = p[i][k]

for j = 1 to n

if dist[n][j] > dist[n][k] + dist[k][j]

dist[n][j] = dist[n][k] + dist[k][j]

p[n][j] = p[n][k]

for i = 1 to n-1

for j = 1 to n-1

if dist[i][j] > dist[i][n] + dist[n][j]

dist[i][j] = dist[i][n] + dist[n][j]

p[i][j] = p[i][n]```

### Complexity

The complexity for this incremental building for a new vertex is clearly O(n2). That makes sense. After all, for n vertices the cost is O(n3) that is the cost of Floyd-Warshall, had all n vertices were considered at one go.

But this incremental building makes a huge difference. For example, consider that we have 1000 vertices for which we have already computed APSP using 1 billion computations. Now that 1001st vertex arrives, we can accommodate the new vertex with a cost of 1 million (approx.) computations instead of doing 1 billion+ computations again from the scratch – something that can be infeasible for many applications.

### Printing Arbitrage Path

We can find the first negative cycle by looking (for a negative value) at the diagonals of the dist[][] matrix, if exists and then print the associated path. For path reconstruction, we can follow the steps as described here.

GitHub: Code will be updated in a week

Index

## 25thFriday Fun Session – 7th Jul 2017

Given a set of currencies and some exchange rates among them, we want to find if there exists an arbitrage; meaning, if it is possible to exploit the discrepancies in the exchange rates and transform one unit of a certain currency to more than one unit of the same, thus making a profit.

This is the solution to JLTi Code Jam – Jun 2017 problem.

### Let us walk through an example

Let us take the example as mentioned here. We can start with 1 USD, convert that to SGD (1.380 SGD), then convert that to MYR (1.380 * 3.080 MYR), then convert to INR (1.380 * 3.080 * 15.120 INR), then convert to GBP (1.380 * 3.080 * 15.120 * 0.012 GBP), then convert that back to USD (1.380 * 3.080 * 15.120 * 0.012 * 1.30 = 1.0025503488 USD).

We end up with more than 1 USD. That means, we have an arbitrage in this set of exchange rates. The profit making cycle here is: USD -> SGD -> MYR -> INR -> GBP. And since it is a cycle, we can start from any currency within it. For example, SGD -> MYR -> INR -> GBP -> USD also represents the same cycle.

### The transformation

In general, if we have to make a profit, the respective rates in the cycle, when multiplied, should give more than 1, as we have seen in the above example.

### Negative cycle in Bellman-Ford

After some simple transformation of the profit making condition, we see, if we take negative of log rate, and use that as the edge cost/distance, then finding profit making cycle is equivalent to finding negative cycle in the corresponding graph. And we can do so using Bellman-Ford algorithm.

To be precise, each of the currencies would be considered as a vertex. If there exists an exchange rate r between two currencies then there would be a directed edge between the corresponding vertices, and –log r would be the associated cost/distance of that edge.

### Source of Bellman-Ford

The next question comes: using which vertex as source shall we run the Bellman-Ford? Let us see the below graph.

Suppose, we have a single profit making cycle here: GBP-> AUD -> CAD. In that case, if we start with USD as source vertex, we will never detect this cycle.

### Add extra currency as source

To solve this problem, we need to add an extra currency, and then create edges from it to all the existing currencies with cost 0. Now using this extra vertex (EXT) as source we have to run Bellman-Ford and that would ensure that we can detect a cycle, if there exist one.

GitHub: Manipulating Money Exchange

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