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You are friends with the Governor of the Bank of Canada. He admits that the Bank of Canada is going to lower interest rates. This
You are friends with the Governor of the Bank of Canada. He admits that the Bank of Canada is going to lower interest rates. This will come as a complete surprise to the market. You want to profit from this knowledge. What is your best investment strategy?
A) Buy Short maturity bonds
B) Buy long maturity bonds
C) Short sell short maturity bonds
D) Short sell long maturity bonds
Please explain with detail. Thanks in advance.
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