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Suppose an investment bank is buying $50 million in long-term mortgage-backed securities and finances the investment by borrowing 75% and paying for the other 25%

Suppose an investment bank is buying $50 million in long-term mortgage-backed securities and finances the investment by borrowing 75% and paying for the other 25% out of equity. What is the bank's leverage ratio?

Select one:

A. 0.20

B. 0.25

C. 4

D. 10

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