Which of the following are likely to occur when interest rates rise sharply?
A)Fixed-rate loans are pre-paid.
B)Bonds are called.
C)Deposits are withdrawn early.
D)All of the above occur when interest rates rise sharply.
E)a.and b.

Question

Quizplus · Accepted Answer

When interest rates rise sharply, depositors may withdraw their funds early to seek better returns elsewhere, but fixed-rate loans are less likely to be prepaid, and bonds are less likely to be called.

Which of the Following Are Likely to Occur When Interest