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True False Question ,please explain it 3 sentence Expecting that the government is going to lower...

True False Question ,please explain it 3 sentence

Expecting that the government is going to lower the interest rate and keep it low for prolonged period, you should hold more financial securities with long maturity. such as bonds and stocks

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Answer #1

Given statment is FALSE.

Stock & Bond both are Trading secutrity.

Longter Security: More than 12 Month Investment & Intend to sell After 12 monh to get out profit.

Short term Security : less than 12 Month Investment & Intend to sell before 12 monh to get out profit.

  • If goverment reducing the intrest for Long period then no one can invest for longer time as a long term security.
  • All Invester are Divert their Investment from Long term to Short term.
  • As a Investor If you can know there is no Sustantial return for long term investment then no one can invest.
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