If the interest rate falls, you would expect the price of any stock to
A) rise.
B) fall.
C) be unaffected.
D) fall to zero.

Name: If the interest rate falls, you would expect the price of any stock to A) rise. B) fall. C) be unaffected. D) fall to zero.
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Question

Quizplus · Accepted Answer

When interest rates fall, borrowing becomes cheaper and more money is available in the economy. This leads to an increase in consumer and business spending, which can lead to an increase in company profits and ultimately push up stock prices.

If the Interest Rate Falls, You Would Expect the Price