Market Economists All Predict a Rise in Interest Rates

question 49

Multiple Choice

Market economists all predict a rise in interest rates. An astute bond manager wishing to maximize her capital gain might employ which strategy?

• A) Switch from low-duration to high-duration bonds.
• B) Switch from high-duration to low-duration bonds.
• C) Switch from high-grade to low-grade bonds.
• D) Switch from low-coupon to high-coupon bonds.

---

Definitions:

Sales

The total amount of goods or services sold by a company during a specific period, often seen as a critical measure of business performance.

External Financing

External financing encompasses funds raised by a business from outside sources, such as loans, bonds, or equity financing, as opposed to internal sources like retained earnings.

Sales Capacity

The maximum volume or number of sales that a company can achieve within a specific period, considering its resources and constraints.

Future Sales

The anticipated revenue from goods or services that will be sold in a future period, often based on contracts, orders, or market analysis.