If interest rates are expected to decline,invest heavier in _________________.

Question

Quizplus · Accepted Answer

When interest rates are expected to decline, the prices of long-term bonds increase the most. This is because as interest rates drop, the fixed interest payments on long-term bonds become more valuable relative to newly issued bonds with lower interest rates. Therefore, investing heavier in long-term bonds would result in the highest returns in this scenario.

If Interest Rates Are Expected to Decline,invest Heavier in _________________