U.S.banks tend to fare best when the yield curve is:
A)horizontal.
B)downward-sloping.
C)vertical.
D)upward-sloping.
E)None of the options is correct.

Question

Quizplus · Accepted Answer

U.S. banks tend to fare best when the yield curve is upward-sloping because it allows them to generate more profit on loans than what they pay out on deposits, resulting in a wider net interest margin. This means they can lend at higher interest rates while still attracting deposits at lower rates, thus increasing profits.

USBanks Tend to Fare Best When the Yield Curve Is