Your video-game addicted nephew tells you that the Nintendo Wii ...

[lb_gilbert]

Your video-game addicted nephew tells you that the Nintendo Wii is much better than the Microsoft X-Box.
 
  To take advantage of this information, you decide to build a two asset portfolio by buying shares in Nintendo and selling shares short in Microsoft. For your long position you buy 1700 shares of Nintendo at a price of 40 per share. For the short position, you sell 1000 shares in Microsoft at a price of 35 per share. What is the portfolio weight for your short position in Microsoft?
  A) -1.06
  B) -0.94
  C) 0
  D) 0.34
  E) 0.50

Question 2

MacroMedia Inc. 1,000 par value bonds are selling for 1,265. Which of the following statements is TRUE?
 
  A) The bond market currently requires a rate (yield) less than the coupon rate.
  B) The bonds are selling at a premium to the par value.
  C) The coupon rate is greater than the yield to maturity.
  D) All of the above are true.

[ankilker]

Answer to Question 1

A

Answer to Question 2

Answer: D

[lb_gilbert]

Thank you

[ankilker]

No problemo