If an Investor Thinks Interest Rates Are Likely to Rise

question 99

Multiple Choice

If an investor thinks interest rates are likely to rise, she would:

• A) sell her bonds and hold more money.
• B) buy more bonds now and hold less money.
• C) not alter her bond portfolio until interest rates actually rise.
• D) not change her money holdings at all.

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Definitions:

Church Donations

Contributions made by individuals or entities to a church, which can be monetary or in the form of goods and services.

Publicly Held Corporations

Companies that sell their shares publicly, allowing the public to invest and own a portion of the company.

Professional Managers

Individuals or entities specialized in overseeing and making managerial decisions for businesses or organizations to ensure their effective and efficient operation.

Close Corporations

Privately held businesses with a small number of shareholders and no public market for their shares, often operated by the shareholders themselves.