In a regression analysis using a bank's stock return, an interest rate proxy, and market returns, a ____ coefficient for the interest rate variable suggests that the bank's performance is ____affected by ____ interest rates.

Question

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A negative coefficient for the interest rate variable suggests that the bank's performance is adversely affected by rising interest rates. This is because when interest rates go up, borrowing costs increase for the bank, leading to lower profits and lower stock returns.

In a Regression Analysis Using a Bank's Stock Return, an Interest