Question 1 (2 points) The return on your portfolio over the last 5 years were 5%, 20%, 0%, 10% and 5%. What was the standard deviation of your return? What was the arithmetic average? O a) 9.62%; 15.00%. O b) 9.62%; 8.00%. O c) 5.31%; 5.65%. ( d) 7.58%; 8.00%.Question 5 (2 points} The use of WACC to select investments is theoretically acceptable when: 0 a} the systematic risk of the projects are equal to the systematic risk of the firm. 0 b} the firm is well diversified and the unsystematic risk is negligible. 0 c] the NPV is positive when discounted by the WACC. 0 d) the correlation of all new projects are equal. Question 3 (2 points) You have the following bonds to choose from i. 2% coupon, 20 year maturity ii. 2% coupon, 10 year maturity iii. Zero coupon, 20 year maturity iv. 1% coupon, 20 year maturity Assume that your primary goal is to minimize price sensitivity. Which of the following bond rankings best meets this goal (i.e. order the bonds from least price sensitive to the most price sensitive)? O a) ii), iii), iv), i) O b) iii), i), iv), ii) O c) ii), i), iv), ii) O d) iii), iv), i), ii)Question 4 (2 points) You decide to invest in a portfolio with two Exchange Traded Funds (ETFs). ETF 1 has a standard deviation of 13.4%, and an expected return of 4.3%. ETF 2 has a standard deviation of 19.7% and an expected return of 9.7%. The covariance of the ETFs is 0. If your goal is to minimize the risk of the portfolio, which of the below proportional ownerships is the best option? O a) 25% ETF 1 / 75 % ETF 2 O b) 75% ETF 1 / 25 % ETF 2 O c) 90% ETF 1 / 10% ETF 2 O d) 10% ETF 1 / 90 % ETF 2Question 2 (2 points) Beta measures risk. a) unsystematic risk b) total O c) nondiversifiable O d) systematic risk