Stock prices will increase,ceteris paribus,when the prevailing interest rate increases.

Name: Stock prices will increase,ceteris paribus,when the prevailing interest rate increases.
Brand: Quizplus
Rating: 4.9 (36 reviews)

Question

Quizplus · Accepted Answer

This statement is false. Generally, when interest rates increase, it becomes more expensive for companies to borrow money, which can decrease their earnings and therefore lower stock prices. However, there may be certain scenarios where an increase in interest rates may be beneficial for certain industries or markets.

Stock Prices Will Increase,ceteris Paribus,when the Prevailing Interest Rate Increases