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If there is a decline in interest rates, which would you rather be holding, long-term bonds or short-term bonds? Why? Using a supply-and-demand analysis for

  1. If there is a decline in interest rates, which would you rather be holding, long-term bonds or short-term bonds? Why?
  2. Using a supply-and-demand analysis for bonds, show what the effect is on interest rates when the riskiness of bonds rises.

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