Which of the Following Situations Would Be Most Likely to Result

question 15

Multiple Choice

Which of the following situations would be most likely to result in a negative mark-to-market for a bank borrowing short term and lending long term?

• A) credit spread tightening of the long term position
• B) if the yield curve is inverted
• C) if the yield curve becomes steeper
• D) if there is a downward parallel shift in the yield curve

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