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. You are having a discussion with your classmates and one of them makes the following observation. In the corporate finance studies, we learnt that
. You are having a discussion with your classmates and one of them makes the following observation. In the corporate finance studies, we learnt that credit risk is measured by the leverage ratio. Why then do we bother in this course to use risk-adjusted capital measure instead of the leverage ratio? Respond, fully justifying your answer with example(s)
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