A monetary expansion ________ stock prices due to a decrease in the ________ and an increase in the ________,everything else held constant.
A)reduces;future sales price;expected rate of return
B)reduces;current dividend;expected rate of return
C)increases;required rate of return;future sales price
D)increases;required rate of return;dividend growth rate

Question

Quizplus · Accepted Answer

A monetary expansion typically lowers interest rates, which decreases the required rate of return on investments, making stocks more attractive. Additionally, it can lead to expectations of higher economic growth, increasing the dividend growth rate, thus boosting stock prices.

A Monetary Expansion ________ Stock Prices Due to a Decrease