A previously well-respected and trusted president of a corporation is accused of fraud. At the same time interest rates unexpectedly fall. Which of the above would tend to make the price of the stock rise?
A)the announcement and the fall in interest rates
B)the announcement but not the fall in interest rates
C)the fall in interest rates, but not the announcement
D)neither the announcement nor the fall in interest rates

Question

Quizplus · Accepted Answer

The fall in interest rates would tend to make the price of the stock rise because lower interest rates generally reduce the cost of borrowing and can increase investment and spending, which can positively affect stock prices. The announcement of fraud would likely have a negative impact on the stock price.

A Previously Well-Respected and Trusted President of a Corporation Is