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interest-sensitive stock investment & finance definition
A stock that is particularly sensitive to changes in
interest rates. Often interest-sensitive stocks are bank stocks. When interest
rates rise, shares of banks may move lower. That occurs because banks are
locked into long-term loan contracts with borrowers and can’t raise their
interest rates up to the market rate, which can pressure earnings. The interest
rate they have to pay to deposit holders increases also.
See interest-sensitive stock in Wall Street Words