There are three scenarios for this assignment. For each scenario, provide your evaluation complete with supporting information and sources of your information.

1. Assume that breaking news causes bond portfolio managers to suddenly expect much higher economic growth. How might this expectation affect bond prices?
2. Assume that oil-producing countries have agreed to reduce their oil production by 30 percent. How would this announcement affect bond prices?
3. Assume that inflation is expected to decline over the next 24 months. How could this affect future bond prices? Would you recommend that financial institutions increase or decrease their concentration in long-term bonds, based on this expectation?