Question
Since 2008, interest rates have been exceptionally low. At the end of 2020 the Central Banks of Canada and the US announced they were considering
Since 2008, interest rates have been exceptionally low. At the end of 2020 the Central Banks of Canada and the US announced they were considering raising interest rates in the future. What is the expected impact on stock prices after the announcement, holding dividend growth rates constant? How does your answer depend on whether traders have adaptive expectations or rational expectations?
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