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3. Suppose that you are the sole shareholder of a bank with deposits of $1,200,000 and assets of $1,000,000. There is no reserve requirement. Your

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3. Suppose that you are the sole shareholder of a bank with deposits of $1,200,000 and assets of $1,000,000. There is no reserve requirement. Your liability in the bank is limited by law to your investment. You are risk neutral. (a) What is the bank's net worth? (5%) (b) Suppose you may reinvest your assets into only one of the following projects before the bank examiners audit your books

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