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6. You are the manager of a hedge fund and believe that the automotive industry is going to do really well next year. While all

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6. You are the manager of a hedge fund and believe that the automotive industry is going to do really well next year. While all makes are expected to do well and share prices will increase for every listed firm, you are certain that Toyota is going to outperform Honda, a rival car company, and you wish to set up a trade. Which of the following is an investment strategy that will make money if you are right about the relative performance of the two firms? 1. Long Toyota, short Honda 2. Long Toyota, long Honda 3. Short Toyota, long Honda 4. Short Toyota, long Honda

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