Suppose the interest rates on one-, five-, and 10-year Canada bonds are currently 3%, 6%, and 6%,

Question:

Suppose the interest rates on one-, five-, and 10-year Canada bonds are currently 3%, 6%, and 6%, respectively. Investor A chooses to hold only one-year bonds and Investor B is indifferent between holding five- and 10-year bonds. How can you explain the behaviours of Investors A and B?

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