If the central bank raises interest rates, there will be a reduction in the value of financial assets.

Question

Quizplus · Accepted Answer

Higher interest rates generally lead to lower prices for existing bonds and other fixed-income securities, as new issues come with higher yields, making the older, lower-yielding ones less attractive. This principle can also negatively affect stock prices due to increased borrowing costs and potentially slower economic growth.

If the Central Bank Raises Interest Rates, There Will Be