Loan in the event the bad outcome occurred

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Reference no: EM131525612

Consider an investment that pays off $800 or $1,400 per $1,000 invested with equal probability. What is the maximum leverage ratio you could have and still have enough to repay the loan in the event the bad outcome occurred?

Instructions: Enter your answers as whole numbers.

The bad outcome pays off $ per $1,000 invested, so you lose $ per $1,000 invested. Given that you have $1,000, the maximum leverage ratio you could have is .

Reference no: EM131525612

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