When the yield curve is downward sloping, generally a financial manager should

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When the yield curve is downward sloping, it usually means that short-term interest rates are higher than long-term interest rates. This indicates that the market expects interest rates to decrease in the future. In this situation, it is advisable for a financial manager to utilize short-term financing as interest rates are expected to decline, which reduces financing costs. Utilizing long-term financing would result in higher costs and cause a financial burden in the future as interest rates are expected to decrease. Therefore, option D, utilizing short-term financing, is the best choice in this scenario.

When the Yield Curve Is Downward Sloping, Generally a Financial