please answer both!!! rating will be given, much appreciated

1- Currencies U.S. dollar foreign-exchange rates. May 5, 2011

Country/currency.in US$............per US$

British Pound1.53470.6516

Norwegian Kroner...0.16905.9173

Thai Baht..0.031032.250

Suppose a Big Mac costs $3.27 in Boston, and 101 Thai Baht in Thailand. In this circumstance, what can we say is TRUE?

	a.	Purchasing Power Parity does not hold, and Big Macs are relatively expensive in Thailand
	b.	Purchasing Power Parity holds, and Big Macs are relatively expensive in Thailand
	c.	Purchasing Power Parity holds, and Big Macs are relatively cheap in Thailand
	d.	Purchasing Power Parity holds, and Big Macs cost the same in these two cities
	e.	Purchasing Power Parity does not hold, and Big Macs are relatively cheap in Thailand

2- A portfolio is formed with 50% of your money in Stock 1 and 50% of your money in stock 2. Stock 1 has a standard deviation of 0.03, and stock 2 has a standard deviation of 0.075. Which comes closest to the portfolio variance if the covariance between Stock 1 and Stock 2 is -0.005?

	a.	-0.0009
	b.	-0.011
	c.	-0.002
	d.	-0.0002
	e.	-0.005