23. An economic downturn lead to your AAA bonds to be downgraded to A and now sell at i=11.11%. If you need $10 million of mark to market bonds, how many do you need (round to the nearest 500)? Compared to the above question, how much more costly/cheaper is your collateral?

Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter19: The Basic Tools Of Finance
Section: Chapter Questions
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23. An economic downturn lead to your
AAA bonds to be downgraded to A and
now sell at i=11.11%. If you need $10
million of mark to market bonds, how many
do you need (round to the nearest 500)?
Compared to the above question, how
much more costly/cheaper is your
collateral?
Transcribed Image Text:23. An economic downturn lead to your AAA bonds to be downgraded to A and now sell at i=11.11%. If you need $10 million of mark to market bonds, how many do you need (round to the nearest 500)? Compared to the above question, how much more costly/cheaper is your collateral?
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