You have the same investment in shares of the bank

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Consider the following two events: (a) a bank loses $1 billion from an unexpected lawsuit relating to its transaction with a counterparty and (b) an insurance company loses $1 billion because of an unexpected hurricane in Texas. Suppose that you have the same investment in shares of the bank and the insurance company. Which loss are you more concerned about? Why?

Reference no: EM132046138

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