Stacy Picone is an aggressive bond trader who likes to speculate on interest rate swings. Market interest rates are currently at $10\mathrm{.}0\%,$ but she expects them to fall to $8\mathrm{.}0\%$ within a year. As a$$ result, Stacy is thinking about buying either a$25-$year, zero$-$coupon bond or a$20-$year, $8\mathrm{.}5\%$ bond.$($Both bonds have$$ $$1,000$ par values and carry the same agency$$ rating.$)$ Assuming that Stacy wants to maximize capital$$ gains, which of the two issues should she$$ select? What if she wants to maximize the total return$($interest income and capital$$ gains$)$ from her$$ investment? Why did one issue provide better capital gains than the$$ other? Based on the duration of each$$ bond, which one should be more price$$ volatile?

Please answer the following questions below

The capital gain of the zero$-$coupon bond is $

The capital gain of the coupon$-$bearing bond is $

Assuming that Stacy wants to maximize capital gains, the issue she should select is the

The holding period return of the zero$-$coupon bond is

The holding period return of the coupon$-$bearing bond is

If she wants to maximize the total holding period return from her investment, the issue she should select is the