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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.
What is the effect of rising earnings on stock prices? Use a derivative to show the effect.
Expert's answer
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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