An unexpected rise in the Purchasing Managers' Index should send bond prices __________ and stock prices __________.
A) up; up
B) up; down
C) down; up
D) down; down

Question

Quizplus · Accepted Answer

An unexpected rise in the Purchasing Managers' Index (PMI) is generally seen as a positive indicator for economic health, suggesting increased business activity. This optimism can lead to a rise in stock prices as investors anticipate higher corporate earnings. However, it might also lead to higher interest rates as the economy heats up, which negatively affects bond prices since their fixed payments become less attractive compared to rising yields elsewhere.

An Unexpected Rise in the Purchasing Managers' Index Should Send