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Your best friend Janet is an expert in monetary policy. She informs you that interest rates will decline in the near future even though the
Your best friend Janet is an expert in monetary policy. She informs you that interest rates will decline in the near future even though the bond market is not indicating any sign of this change. Based on Janet's information, which one of the following bonds should you purchase now to maximize your profits?
A) Long-term; low coupon
B) Long-term; high coupon
C) Short-term; low coupon.
D) Long-term; zero coupon.
E) Short-term; high coupon.
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