Pedro is trying to take advantage of the bond valuation relationships. He has figured out that when you expect interest rates to go up, buy ________ bonds and when you expect interest rates to go down, buy ________.

a. government bonds; short-term bonds
b. interest-indexed bonds; long-term bonds
c. very long-term; bonds with very short-term maturities that are not callable
d. very short-term; bonds with very long-term maturities that are not callable
e. interest-proof; long-term bonds

Answer rating: 100% (QA)

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