Which of the Following Would Be Most Likely to Push

question 175

Multiple Choice

Which of the following would be most likely to push stock prices higher?

• A) higher interest rates and the expectation of larger future corporate profits
• B) higher interest rates and the expectation of smaller future corporate profits
• C) lower interest rates and the expectation of larger future corporate profits
• D) lower interest rates and the expectation of smaller future corporate profits

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Definitions:

Net Income

The total earnings of an organization after subtracting all expenses, taxes, and costs from its total revenue.

Net Margin

A financial metric that shows the percentage of revenue remaining after all operating expenses, interest, taxes, and preferred stock dividends have been deducted from a company's total revenue.

Sales

The process of selling goods or services to customers in exchange for money or other compensation.

Net Margin

A profitability metric calculated as net income divided by revenue, expressed as a percentage, indicating how much of each dollar in revenues is translated into profits.