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You are running a bond portfolio and you believe interest rates are going to decrease. What types of bonds should you hold in your portfolio?

You are running a bond portfolio and you believe interest rates are going to decrease. What types of bonds should you hold in your portfolio?

  • Short term bonds with high coupon rates

  • It does not matter since interest rates do not affect bond prices

  • Long term bonds with low coupon rates

  • Short term bonds with low coupon rates

  • Long term bonds with high coupon rates

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