You Expect Interest Rates to Decline and Wish to Capitalize

Multiple Choice

You expect interest rates to decline and wish to capitalize on the anticipated changes in bond prices. To realize your maximum gain, all else constant, you should purchase _____ bonds.

A) Short-term; low coupon.
B) Short-term; high coupon.
C) Long-term; zero-coupon.
D) Long-term; low coupon.
E) Long-term; high coupon.