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6 years ago
Suppose an investment bank is buying $50 million in long-term mortgage-backed securities, and finances the investment by borrowing 80% and paying for the other 20% out of equity. What is the bank's return on its equity investment if the value of the mortgage-backed securities increases by 10% during the year after they are purchased?
A) 12.5%
B) 25%
C) 50%
D) 88%
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Money, Banking, and the Financial System

Money, Banking, and the Financial System


Edition: 3rd
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6 years ago
Thanks
spaghetti
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Yesterday
I appreciate what you did here, answered it right Smiling Face with Open Mouth
dri
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2 hours ago
this is exactly what I needed
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