Question content area

Part $1$

If interest rates$$ decline, which would you rather be$$ holding, long$-$term bonds or$$ short$-$term bonds?

Part $2$

A$.$

$$Long$-$term bonds because their price is likely to fall

B$.$

$$Short$-$term bonds because their price would increase more than the price of$$ long$-$term bonds

C$.$

$$Long$-$term bonds because their price would increase more than the price of$$ short$-$term bonds

D$.$

$$Short$-$term bonds because their price is less sensitive to$$ interest$-$rate volatility