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SalaDinHo SalaDinHo
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5 years ago

In an effort to maintain price stability, it is expected that the European Central Bank will raise interest rates in the future. Which of the following is the most likely effect of such an action on short- and long-term interest rates in Europe?



▸ Long-term interest rates will tend to be higher than short-term interest rates.

▸ Both long- and short-term interest rates would be expected to fall sharply.

▸ Long-term interest rates will be about the same as short-term interest rates.

▸ No relative change in short and long term interest rates could be predicted.
Textbook 
Fundamentals of Corporate Finance

Fundamentals of Corporate Finance


Edition: 2nd
Authors:
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cuddahy99cuddahy99
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SalaDinHo Author
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#2
5 years ago
Smart ... Thanks!
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