en 34 + Which bond's price is LEAST sensitive to changes in interest rates? ed dout of question Bond Issuer Rating Coupon Yield Maturity A Government of Canada Risk Free 7% 7.42% 10 years . B Government of Canada Risk Free 6% 17.90% 30 years C B.C. Provincial Government AAA 7.5% 17.77% 10 years 8% D 17.87% 5 years AAA Royal Bank Select one: O a. B O b. A . O d.D 36 You want to buy $20,000 worth of shares in Tootsie Roll Industries Inc on margin, but you only have $10,000 of your own money to invest. The remaining $10,000 is borrowed by issuing T-Bills; assume the cost of borrowing is the risk-free rate. What is the portfolio weight for Tootsie Roll? d out of question Select one a. 1.5 Ob 1 O 0.25 Od 0.50 O e.2 37 The beta of a portfolio 2 out of question Select one O is the sum of the betas of all assets in the portfolio, O b. is irrelevant, only the betas of the individual assets are important Oc is the weighted average of the betas of the individual assets in the portfolio Od does not change over time. 38 Which of the following statements is TRUE? out of question Select one: a Calculus of variations (CV) adjusts standard deviations to compare the risk of securities with different expected returns. b. Standard deviations can be computed for stock retums, but not for bond yields. Oc. If the returns from a security are normally distributed, 86% of the observations fall within one standard deviation at the expected value O d. An increase in risk will result in an increase in the standard deviation O e Risk-averse investors prefer securities with high standard deviations