Question
This problem asks you to compare the behavior of investment banks (specifically procyclical leverage) and investors who buy shares on margin. Assume an investment bank
This problem asks you to compare the behavior of investment banks (specifically procyclical leverage) and investors who buy shares on margin. Assume an investment bank has assets of 100, liabilities of 90 and NW of 10. Assume its target leverage ratio (TA/NW) is 9.
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Financial Management Core Concepts
Authors: Raymond Brooks
3rd Edition
0133866742, 9780133866742
