dentify which of the following most correctly completes the following statement: 'In anticipation of a cut in interest rates, fund managers will:

Select the correct answer

1. reduce their holdings of Treasury bonds as their prices are expected to fall.
2. keep their holding of Treasury bonds unchanged as their coupon payments are fixe
3. reduce their holdings of Treasury bonds as their prices coupon payments are expected to fall.
4. increase their holdings of Treasury bonds as their prices are expected to rise.