Predict future interest rates and reflect the trends

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Reference no: EM13840018

Stock prices are useful as a leading indicator. To explain this phenomenon, which of the following is most accurate? Stock prices:

Predict future interest rates and reflect the trends in other indicators.
Do not predict future interest rates, nor are they correlated with other leading indica- tors; the usefulness of stock prices as a leading indicator is a mystery.
Reflect the trends in other leading indicators only and do not have predictive power of their own.

Reference no: EM13840018

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