× Didn't find what you were looking for? Ask a question
Top Posters
Since Sunday
7
e
5
e
4
4
d
4
o
3
p
3
t
3
3
m
3
p
3
m
3
Home Q & A Board Other Fields Homework Help Business Finance
New Topic  
emoji emoji
wrote...
Go to Answer
Posts: 620
Rep: 0 0
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 decreases by 20% during the year after they are purchased?
A) -25%
B) -40%
C) -50%
D) -100%
Textbook 
Money, Banking, and the Financial System

Money, Banking, and the Financial System


Edition: 3rd
Authors:
Read 48 times
1 Reply
Replies
Answer verified by a subject expert
vehmeinvehmein
wrote...
#1
Top Poster
Posts: 714
Rep: 1 0
6 years ago
Sign in or Sign up in seconds to unlock everything for free
More solutions for this book are available here
1

Related Topics

emoji Author
wrote...

6 years ago
Thanks for your help!!
Gamiung3657
wrote...

Yesterday
Just got PERFECT on my quiz
jaray75
wrote...

2 hours ago
This site is awesome
New Topic      
Quick Reply
Explore
Post your homework questions and get free online help from our incredible volunteers
  951 People Browsing
Start New Topic Take the Tour CoursesNew Study Tools Topics Trending Browse by Textbook
Live Chat
Related Images
  
 1608
  
 335
  
 13515
Your Opinion
Who's your favorite biologist?
Votes: 587
Previous poll results: What's your favorite coffee beverage?