Question

The fall in the interest rate is conducive to the stock market because
(A) Money may flow the bond market to stock market

(B) Corporate can borrow at easy terms

(C) brokers can do business at borroed funds

(D) B and C​

Answer 1

Answer:

This means demand for lower-yield bonds will drop (causing their price to drop). As interest rates fall, it becomes easier to borrow money, causing many companies to issue new bonds to finance new ventures. This will cause the demand for higher-yielding bonds to increase, forcing bond prices higher.

Explanation:

(B) Corporate can borrow at easy terms