In: Finance
Interest rates are important to financial institutions since an increase in interest rate ________ the cost of acquiring funds, and an increase in interest rate ________ the income from assets.
A) decreases; decreases
B) increases; increases
C) decreases; increases
D) increases; decreases
Higher the Interest Rate, Higher will be the Cost of acquiring Funds, and Higher the Cost of Acquiring Funds, Lower will be the Returns from Assets.
Therefore, (D) Increases; Decreases