Which factors can contribute to a reduced perception of risk

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1. Using the housing market as an example, explain the following concepts: (a) loan-to-value ratio (b) asset price bubble (c) financial accelerator 2. In the financial asset feedback process, which factors can contribute to a reduced perception of risk? How does the perceived reduction in risk lead to IBs becoming more highly leveraged? Make sure your answer refers to the Value-at-Risk model.

Reference no: EM131101310

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