Complete the sentences by deleting the inappropriate terms. (5 marks)

If interest rates are expected to fall, investors should buy [High / Low] coupon, [Long / Short] term bonds because they are more volatile and therefore have a greater % of [Income / Capital Gain / Capital Loss].

The difference between the cost of commercial paper and its maturity value is taxed as [Income / Capital Gain / Capital Loss].

Bond prices are less sensitive to a 1% change in yield when yields are initially [High / Low].