If you are anticipating a rising interest rate environment, your planning and analysis of your loan and investment portfolio should focus on
A) minimizing fixed rate investments and moving variable rate debt to fixed rate.
B) investing in more fixed rate securities and moving variable rate debt to fixed rate.
C) investing in preferred stock since the dividend rate is above the CD and bond interest rates.
D) investing in CDs since they are insured by FDIC and minimizing borrowing.

Question

Quizplus · Accepted Answer

In a rising interest rate environment, minimizing fixed-rate investments helps avoid being locked into lower yields, and converting variable-rate debt to fixed-rate can protect against increasing interest costs.

If You Are Anticipating a Rising Interest Rate Environment, Your