Suppose interest rates on Treasury bonds rose from 5 to 9 percent as a result of higher interest rates in Euro?
April 5, 2009 by How Savings Bonds Work
Filed under More Bonds Answers
Can you answer RobCK S’s question about Bonds?:
Suppose interest rates on Treasury bonds rose from 5 to 9 percent as a result of higher interest rates in Europe. What effect would this have on the price of an average company’s common stock?
Making Money Online
Suppose interest rates on Treasury bonds rose from 5 to 9 percent as a result of higher interest rates in Europe. What effect would this have on the price of an average company’s common stock?
Making Money Online
Bonds Feedback: I’m not sure. I’m working on that same question for my same Davenport corporate finance class.
Bonds Feedback: Capital will tend to move into Europe or in Treasury bonds to capture these lower risk and higher returns, thus demand for other securities will fall consequently leading to fall in it’s average prices (it’s sort of crowding-out effect).
P.S. You are asking many economics questions but in wrong categories (for instance math etc.) If you will ask here, then probability of receiving relevant answers is much higher, so “Economics” or “Business and finance” categories are best for such questions.