The Fed announces a tightening of monetary policy,leading to an increase in interest rates.Other things remaining equal,P/E ratios for stocks will decrease.

Name: The Fed announces a tightening of monetary policy,leading to an increase in interest rates.Other things remaining equal,P/E ratios for stocks will decrease.
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Question

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When interest rates increase, borrowing and spending decreases, leading to a decrease in company profits and hence, lower P/E ratios for stocks.

The Fed Announces a Tightening of Monetary Policy,leading to an Increase