Stock Prices May Rise from a Reduction in Interest Rates

question 44

Multiple Choice

Stock prices may rise from a reduction in interest rates because:

• A) consumer and business confidence about future growth improves.
• B) stockholders will expect lower future earnings.
• C) financial market participants are less optimistic about future earnings.
• D) the present value of future earnings will decrease.

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Definitions:

Central Nervous System

The part of the nervous system consisting of the brain and spinal cord, which coordinates and controls body activities.

Synaptic Vesicles

Membrane-bound sacs located within axon terminals, responsible for storing neurotransmitters that are released into the synaptic gap during neurotransmission.

Synapse

The junction between two neurons where nerve impulses are transmitted from one to another, often through the release of neurotransmitters.

Presynaptic Membrane

The membrane of a nerve cell terminal that is proximal to the synaptic cleft and releases neurotransmitters in response to an action potential.