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14-1 Suppose interest rates on residential mortgages of equal risk were 8% in California and 10% in New York. Could this differential persist? What forces

14-1 Suppose interest rates on residential mortgages of equal risk were 8% in California and 10% in New York. Could this differential persist? What forces might tend to equalize rates? Would the same differentials exist in business risk? Why would this differential be different?

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