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7 9 . Suppose you could reduce by fifty percent ( 5 0 % ) a known project debt of $ 1 0 0 ,

79 .

Suppose you could reduce by fifty percent

(50 %)

a known project debt of $

100, 000

to $

20, 000

by means of an insurance policy that will cost $

10, 000 .

What is the risk financial leverage, and would you buy the insurance? Please provide your rationale.

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