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Finra Series-7 Exam - Topic 2 Question 1 Discussion

Common stocks for which of the following industries are most likely to decline in value when interest rates rise?
D) public utility companies
A) automobile manufacturers
B) airlines
C) stock brokers

Finra Series-7 Exam - Topic 2 Question 1 Discussion

Actual exam question for Finra's Series-7 exam
Question #: 1
Topic #: 2
[All Series-7 Questions]

Common stocks for which of the following industries are most likely to decline in value when interest rates rise?

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Suggested Answer: D

public utility companies. Interest rates most affect the companies with the greatest amount of debt. Public utility companies are highly leveraged. Hence, they most likely incur the largest effect of rising interest rates.


by Salena at May 05, 2022, 10:24 PM

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Arlene
10 months ago
Good point about stock brokers too, they might struggle with higher rates.
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Delisa
10 months ago
Wait, are we sure about airlines? Seems like they always bounce back.
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Lanie
11 months ago
I disagree, public utilities are usually stable regardless of rates.
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Britt
11 months ago
I think A is more likely to decline, cars are expensive!
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Carman
11 months ago
Definitely B, airlines get hit hard with rising rates.
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Janna
11 months ago
I vaguely remember that automobile manufacturers could be sensitive to interest rate changes, especially with financing costs for consumers.
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Hailey
11 months ago
I think airlines might struggle with higher interest rates due to their debt levels, but I could be mixing that up with another industry.
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Ula
11 months ago
I remember studying how rising interest rates can impact industries differently, but I'm not sure which one is most affected.
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Alexis
11 months ago
I practiced a similar question about how interest rates affect stock prices. I feel like public utilities are usually more stable, but I can't recall the specifics.
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Alysa
11 months ago
This seems like a straightforward question about when the investigator should report their findings. I'll carefully read through the options and choose the one that best fits the question.
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Georgeanna
11 months ago
Okay, I remember learning about this in class. I think the key is to focus on the flow from outcomes to benefits to corporate objectives.
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