Problem 2: Portfolio with short position (4 points) Consider a portfolio consisting of a short position in 10,000 shares of Facebook and the necessary collateral. At the time the short position was created, Facebook's share price was $40. The proceeds from shorting these shares, along with the 50% margin requirement, were invested in US treasury bonds maturing in 10 years. (a) What is the liquidation value of the portfolio on the day it was formed? Liquidation Value: 1 point) (b) What are the portfolio weights for Facebook stock and US treasury bonds? Facebook Weight: Treasury Weightl point) (c) Say that one month after this portfolio was formed, Facebook's stock price had risen 15% and the treasury bond's price had fallen 1%. Neither asset payed any dividends or coupons. What is the portfolio's return for this month? Portfolio Return:( (d) In the scenario described in part (c), what is the new (at the end of the month) liquidation value of the portfolio? Liquidation Value: (1 point) Problem 2: Portfolio with short position (4 points) Consider a portfolio consisting of a short position in 10,000 shares of Facebook and the necessary collateral. At the time the short position was created, Facebook's share price was $40. The proceeds from shorting these shares, along with the 50% margin requirement, were invested in US treasury bonds maturing in 10 years. (a) What is the liquidation value of the portfolio on the day it was formed? Liquidation Value: 1 point) (b) What are the portfolio weights for Facebook stock and US treasury bonds? Facebook Weight: Treasury Weightl point) (c) Say that one month after this portfolio was formed, Facebook's stock price had risen 15% and the treasury bond's price had fallen 1%. Neither asset payed any dividends or coupons. What is the portfolio's return for this month? Portfolio Return:( (d) In the scenario described in part (c), what is the new (at the end of the month) liquidation value of the portfolio? Liquidation Value: (1 point)