If you expect that interest rates will decline, you may consider investing in bonds with longer maturities than the time you will need the funds.

Question

Quizplus · Accepted Answer

When interest rates decline, existing bonds with longer maturities become more valuable, as their fixed rates become more attractive compared to new bonds with lower rates. Therefore, investing in longer-term bonds can provide higher returns when interest rates drop.

If You Expect That Interest Rates Will Decline, You May