Why Do Rising Interest Rates Generally Depress Stock Prices

question 53

Multiple Choice

Why do rising interest rates generally depress stock prices?

• A)Businesses have to pay higher interest rates to borrow money, thus reducing their profits.
• B)Stock investors tend to take their money out of the stock market and invest in interest-paying investments.
• C)Future earnings will not be worth as much as today.
• D)All of these.

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Definitions:

Throughput

Throughput is the rate at which a system generates its products or services, a key performance measure in manufacturing, computing, and communication systems.

Raw Materials

The unprocessed or minimally processed resources used to produce goods or products, typically extracted from natural sources.

Finished Products

Goods that have completed the manufacturing process and are ready for sale or distribution to customers.

5Ss

A workplace organization methodology focusing on standardizing procedures and optimizing cleanliness and order, originating from five Japanese terms: Seiri, Seiton, Seiso, Seiketsu, and Shitsuke.