Question

When the bond investor believes interest rates are going to fall, the best strategy would be to: A. take a bearish position in the market by selling long-term bonds. B. take a bullish position in the market by buying long-term bonds. C. move out of bonds completely. D. keep his portfolio unchanged.

Answer 1

The answer is "Option B".

Step-by-step explanation:

Investment in long-term bond financing, as well as other long-term bonds, focuses on long-term returns assets with their very own risks and also higher income. Therefore, these funds can be outstanding commercial vehicles but not generally the best investment. It refers particularly to investors who seek to raise revenue and minimize uncertainty, that's why choice B is correct.