The discussion of supply and demand in Chapter 3 noted that, if two goods are substitutes for

Question:

The discussion of supply and demand in Chapter 3 noted that, if two goods are substitutes for each other, the price of one and the demand for the other are directly related. For example, if Pepsi-Cola and Coca-Cola are substitutes, an increase in the price of Pepsi-Cola will increase the demand for Coca-Cola. Suppose that bonds and are substitutes. We know that interest rates and bond prices are inversely related. What do you predict is the relationship between stock prices and interest rates? Explain your answer.
Stocks
Stocks or shares are generally equity instruments that provide the largest source of raising funds in any public or private listed company's. The instruments are issued on a stock exchange from where a large number of general public who are willing...