Question
You opened up a new bank. You take deposits and invest in very safe assets: government bonds that would never default. However, if you want
You opened up a new bank. You take deposits and invest in very safe assets: government bonds that would never default. However, if you want to sell government bonds in large quantities and within a short period of time, you generally have accept a slippage of about 2%. Explain why you can still go bankrupt.
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