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Three steps and a stumble rule

Definition:

A rule predicting that stock and bond prices will fall following three increases in the discount rate by the Federal Reserve. This is a result of increased costs of borrowing for companies and the increased attractiveness of money market funds and CDs over stocks and bonds as a result of the higher interest rates.

Investing Essentials


Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University

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Options Clearing Corporation (OCC)

Applies to derivative products. Financial institution that is the actual issuer and guarantor of all listed option contracts.

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