If you are a banker and expect interest rates to rise in the future, would you want to make short-term or long loans?
a- You would want to make long-term loans to secure the higher interest rate for an extended of time
b- You would want to make short-term loans since there is no guarantee that the intreset rate will rise as expected
c- You would want to make short-term loans so you can reinvest the funds at higher interest rates after their maturity
d- Both short- term and long-term loans will be profitable with an expected interest rate increase