Suppose you expect interest rates to increase in the future. You are not indifferent toward interest rate

Question:

Suppose you expect interest rates to increase in the future. You are not indifferent toward interest rate risk and desire to maximize expected return. If you hold a portfolio consisting of 50 percent short-term bonds (< l year to maturity) and 50 percent long-term bonds, how might you adjust your portfolio to maximize your profit? Explain carefully.

Portfolio
A portfolio is a grouping of financial assets such as stocks, bonds, commodities, currencies and cash equivalents, as well as their fund counterparts, including mutual, exchange-traded and closed funds. A portfolio can also consist of non-publicly...

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