An unexpected rise in the growth rate of the CPI 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 CPI (Consumer Price Index) indicates inflation, which generally causes bond prices to fall because the fixed payments from bonds lose purchasing power. Stock prices may also fall as companies' costs rise and consumers' purchasing power decreases, potentially reducing profits and making stocks less attractive.

An Unexpected Rise in the Growth Rate of the CPI