An individual anticipating rising interest rates is likely to hold more
A) money.
B) real assets.
C) stock.
D) bonds.

Question

Quizplus · Accepted Answer

When interest rates are expected to rise, the value of bonds falls. This is because investors can earn a higher return by investing in new bonds that offer a higher interest rate. As a result, individuals who anticipate rising interest rates are likely to hold more money, which is not affected by interest rate changes.

An Individual Anticipating Rising Interest Rates Is Likely to Hold