Answer to Question #85986 in Macroeconomics for Annie Sheoran

Question #85986
What is the effect of rising uncertainty on stock prices? Use a derivative to show the effect.
What is the effect of rising earnings on stock prices? Use a derivative to show the effect.
1
Expert's answer
2019-03-11T10:41:56-0400

The rise of uncertainty on stock prices will cause a decrease in demand for derivatives and an increase in prices for derivatives.

The rise in earnings on stock prices will cause an increase in demand for derivatives and a decrease in prices for derivatives.



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