问题

问题如下：

(1) Based on Statement 1, the net interest margin for the three banks’ most likely will: (curriculum)

选项：

decrease.

remain unchanged.

increase.

解释：

A bank’s net interest margin represents the difference between interest earned on loans and other interest-bearing assets and the level of interest paid on deposits and other interest-bearing liabilities. Banks typically borrow money for shorter terms (retail deposits) and lend to customers for longer periods (mortgages and car loans). If the yield curve unexpectedly inverts, the short-term funding costs will increase and the net interest margin will most likely decrease (not remain unchanged or increase).