You currently own $100,000 worth of 1 year bonds and $100,000 worth of 10 year bonds.

You believe that interest rates are going to decrease tomorrow.

Based on your beliefs, to maximize the benefit to you, TODAY you should .......

(Ignore the cost of trading the bonds)

sell your 10 year bonds and buy an additional $100,000 of the 1 year bonds and expect a capital gain

sell your 10 year bonds and buy an additional $100,000 of the 1 year bonds and expect to avoid a capital loss

sell your 1 year bonds and buy an additional $100,000 of the 10 year bonds and expect to avoid a capital loss

sell your 1 year bonds and buy an additional $100,000 of the 10 year bonds and expect a capital gain