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To a very rough approximation (ignoring risk), one can think of the stock market as a perpetuity with constant dividend payment. If the Federal Reserve
To a very rough approximation (ignoring risk), one can think of the stock market as a perpetuity with constant dividend payment. If the Federal Reserve increases interest rates at the next FOMC meeting, what will happen to the value of the stock market?
a. It will go up.
b. It will go down.
c. Interest rates have no bearing on the stock market.
d. It depends on what investors are expecting before the meeting.
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