Monetary policy: increasing interest rate
so admittedly the question as a whole seems slightly confusing. BUT taking the first part: When the Federal Reserve wants to increase the inter-bank lending rates (The "Fed Funds" rate) -- it SELLS its own Treasury Bills through something called "Open Market Operations." By selling its T-bills, it takes money OUT of the system. Less money in the "system" means the inter-bank lending rate will go up. By selling its securities, it is taking money OUT of the system. Decent video here. 

I'm not sure why your teacher asked about common stocks, or longer-term bonds, etc. The Fed lowers/raises the Fed Funds Rate only through buying &amp; selling short-term Treasury Bonds.