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.

Long-Term

Referring to a period extending over an extensive time, often exceeding one year, especially in contexts like investments or financial planning.

Zero-Coupon Bonds

Bonds that do not pay interest during their life but are sold at a discount from their face value, where the difference between the purchase price and the face value represents the investor's return.

Interest Rates

The proportion of a loan that is charged as interest to the borrower, typically expressed as an annual percentage of the loan amount.