Suppose interest rates have been at historically high levels

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Suppose interest rates have been at historically high levels the past two years and you therefore expect they will soon go down. A reasonable strategy for bond investors during this time period would be to:

invest only in stocks.

invest in short-term bonds to reduce interest rate risk.

buy only junk bonds which have higher interest rates.

invest in long-term bonds to lock in earning the high interest rates.

Reference no: EM13810576

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