When There Is an Upward Sloping Yield Curve and Interest

question 83

Multiple Choice

When there is an upward sloping yield curve and interest rates are forecast to increase a firm decides to restructure its outstanding debt to longer term then in the short-term the company:

• A) faces an immediate decrease in its costs of funds.
• B) faces an immediate increase in its costs of funds.
• C) is reducing its basis risk.
• D) is reducing its business risk.

---

Definitions:

East Coast

Refers to the easternmost region of the United States, often associated with states along the Atlantic Ocean.

West Coast

Referring generally to the western coastal areas of a country, often associated with specific cultural or geographical characteristics.

Consciousness

The state of being aware of and able to think about one's own existence, thoughts, emotions, and surroundings.

Awareness

The ability to consciously perceive, understand, and recognize one’s environment, emotions, and thoughts.