Changes in interest rates can typically affect firms in all of the following ways except :
A) The value of investments in bonds or other investment securities with fixed interest rates.
B) The value of liabilities with fixed interest rates.
C) The returns a firm generates from pension fund investments.
D) The cash-equivalent value of assets invested abroad.

Question

Quizplus · Accepted Answer

Changes in interest rates typically affect the exchange rate, which can affect the value of assets invested abroad. Therefore, option D is incorrect, as it can be affected by changes in interest rates. Options A, B, and C are all correct, as changes in interest rates affect the value of fixed-rate investments and liabilities, as well as the returns generated from pension fund investments.

Changes in Interest Rates Can Typically Affect Firms in All