Suppose interest rates have been at historically low levels the past two years. A reasonable strategy

for bond investors during this time period would be to

A) invest in long-term bonds to lock in a bond position for when interest rates increase in the
future.
B) invest in short-term bonds to reduce interest rate risk.
C) buy only junk bonds which have higher interest rates.
D) invest in long-term bonds to reduce interest rate risk.


B

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