3. Do bondholders perform better when the yield to maturity increases or when it decreases? Why? (think as a bond seller that how will you make the decision)

##Step 1: Understanding Yield to Maturity (YTM)<br />###Yield to maturity (YTM) is the total return anticipated on a bond if it is held until it matures. It takes into account the bond's current market price, par value, coupon interest rate, and time to maturity. A higher YTM implies a lower bond price, and a lower YTM implies a higher bond price.<br /><br />##Step 2: Bondholder's Perspective<br />###Bondholders benefit from price appreciation. If the YTM decreases after a bond is purchased, the bond's price increases, benefiting the bondholder. Conversely, if the YTM increases after purchase, the bond's price decreases, negatively impacting the bondholder.<br /><br />##Step 3: Bond Seller's Decision-Making<br />###As a bond seller, you would want to sell bonds when YTM is low (and prices are high) and buy bonds when YTM is high (and prices are low). This is because you profit from selling high and buying low.<br /><br />#