Will an Increase in Inflation Have a Larger Impact on the Price

question 65

Multiple Choice

Will an increase in inflation have a larger impact on the price of a bond or preferred stock?

• A)The bond.
• B)The preferred stock.
• C)The impact will be the same.
• D)There is not enough information to determine the relative impact.

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Definitions:

Exxon

A multinational oil and gas corporation that is one of the world's largest publicly traded energy providers and chemical manufacturers.

Treasury Bond

Long-term, government-issued debt securities with a fixed interest rate, considered low-risk investments.

Ford

An American multinational automaker known for its production and sale of cars, trucks, and commercial vehicles.

Shell Oil

A major global group of energy and petrochemical companies known for exploring for and extracting crude oil and natural gas.