9. Interest rates and decisions Suppose that a firm is facing an upward-stoping yield curve and needs to borrow money to invest in production. Does this mean that the firm should consider borrowing only at short-term rates? No, an upward-sloping yield curve means that the firm will get a lower interest rate if it uses long-term financing. Yes, using short term financing will give the firm the lowest possible interest rate over the life of the project. O No, the firm needs to take the volatility of short-term rates into account