Edge company is a small company that has a volatile stock price for the past year, with an overall downward trend, but the fed just announced that the discount rate is going down, as well. is the price of edge company's stock likely to rise or fall? explain your prediction.

The Federal Government announcing a decrease of the discount rate should improve the situation of Edge Company, given that when the Federal Reserve makes use of this tool it makes it cheaper for commercial banks to borrow money, which results in the increase in available credit and lending activity throughout the economy. This aid provided by the government when it sees the need in the market increases investment activity, thus, elevating the probability of stock prices to raise.

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