If the interest rate rises, 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 rises, 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 rise, the cost of borrowing money increases, which can have a negative impact on company earnings and cause investors to shift away from stocks and into bonds or other higher-yield investments, causing stock prices to fall.

If the Interest Rate Rises, You Would Expect the Price