Interest Sensitive Stock

Interest-Sensitive Stock - Interest-Sensitive Stock is a stock certificate whose price tends to move in the opposite direction from that of interest rates. Interest-sensitive stock certificates include nearly all preferred stock certificates and the common stock certificates of industries such as electric utilities and savings and loans. A common stock certificate may be interest-sensitive either, because its dividend is a fixed, as with an electric utility, or because the firm raises a large portion of its corporate funds through borrowing, as with a savings and loan or a commercial bank institution. A stock that is particularly sensitive to changes in the interest rates.