You expect interest rates to decline over the next six months.

a. Given our interest rate outlook, state what kinds of bonds you want in our portfolio in terms of duration and explain our reasoning for this choice.

b. You must make a choice between the following three sets of non-callable bonds. For each set, select the bond that would be best for our portfolio given our interest rate outlook and the consequent strategy set forth in Part

a. In each case briefly discuss why you selected the bond.