Series 7 - General Securities Representative Exam

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The Fed just raised reserve requirements. Which of the following is LEAST likely to happen?

Interest rates will increase
A
Bond prices will decrease
B
Interest rates will decrease
C
Banks will lend each other less money
D

Explanations

The fed RAISED reserve requirements. This will make less money available for banks to lend one another and rates will increase due to a tighter money supply. Higher rates = lower bond prices. Tough verbiage on this question - like the exam. Interest rates decreasing is the least likely to happen