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When FED announces to increase interest rates? What should happen to stock market portfolio price? 1. Price should drop. 2. Price should Increase. 3. Price

When FED announces to increase interest rates? What should happen to stock market portfolio price?

1. Price should drop.

2. Price should Increase.

3. Price should drop by a magnitude closer to the drop seen in a 20-year zero-coupon bond than to that in a 1-year bond.

4. Price increase because expected return increases.

1, 3

1

2

2, 4

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