You are a bond analyst working for a hedge fund. A bond you follow has face value 100, has a coupon rate of 5% (paid once a year) and matures in 5 years. You are trying to find if there is any profitable trading strategy. Youve done extensive research and have formed your opinions on future economic conditions. As a result, you expect that there will soon be a major shift in the yield curve. The current and the expected yield curve is shown below:

Year Current Expected 1 1% 3.00% 2 1.50% 2.50% 3 2.00% 3.50% 4 3.00% 4.00%

You are 100% sure about your expectation of the movement of the yield curve in the near future. And you want to set up a trading position before the market price in the future shift of yield curve. What should you do?