ECONOMICS
MONEY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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True
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False
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Either A or B
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None of the above
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Detailed explanation-1: -Interest rates and bonds have an inverse relationship: When interest rates rise, bond prices fall, and vice versa. Newly issued bonds will have higher coupons after rates rise, making bonds with low coupons issued in the lower-rate environment worth less.
Detailed explanation-2: -Rising interest rates make your business debt more expensive, which means you’ll have to use more cash to cover your interest costs. Depending on your business’s overall financial health and profit margins, you might have less flexibility to invest in long-term growth-or less day-to-day cash flow stability.
Detailed explanation-3: -Yes, higher interest rates tend to attract more foreign investment. That’s because rising rates increase the value and demand for their own currency.
Detailed explanation-4: -The downside of higher interest rates is that they tend to hurt most other types of investments, particularly stocks. But slower economic growth usually leads to challenging market conditions. Interest rate changes can affect your debt as well. 21-Sept-2022