Consider the following two events: (a) a bank loses $1 billion from an unexpected lawsuit relating to
Question:
Consider the following two events:
(a) a bank loses $1 billion from an unexpected lawsuit relating to its transactions with a counterparty and
(b) an insurance company loses $1 billion because of an unexpected hurricane in Texas. Suppose you own shares in both the bank and the insurance company. Which loss are you more concerned about? Why?
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