hello. What kind of Bonds (Long term/Short term) should be preferred in follwing situation: 1. Duration is expected to increase. 2. Short term interest rates are expected to fall. 3. lond term interest rates are expected to rise.
- you adjust to changing rates scenario using duration, not otherwise. 2. changes in ST rates have a less definitive impact on long term bond yields. but all else equal, short term bonds will definately benefit from price appreciation as ST rates fall. 3. short duration bonds