3. Suppose a recently published report indicates inflation in both Canada and the U.S. is becoming excessive and the Canadian dollar is weakening. You hear a news report that the bond prices are falling. Which of the following Canadian bonds would experience the lowest % price decrease? Why? (4 marks) i. Low coupon, short-term ii. High coupon, long-term iii. High coupon, short-term iv. Low coupon, long-term 7. If interest rates are expected to fall, investors should buy [High/Low] coupon, (Long / Short] term bonds because they are more volatile and therefore have a greater % of [Income / Capital Gain / Capital Loss). 8. The difference between the cost of commercial paper and its maturity value is taxed as [Income / Capital Gain / Capital Loss), 9. Bond prices are less sensitive to a 1% change in yield when yields are initially [High/Low)