Consider the following balance sheets of two banks. These two banks have equal amounts of assets but are leveraged differently. Assume that there is no regulatory capital requirement. Balance Sheet of Arch Bank Assets Liabilities Outstanding Loans: $100,0

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Consider the following balance sheets of two banks. These two banks have equal amounts of assets but are leveraged differently. Assume that there is no regulatory capital requirement. Balance Sheet of Arch Bank Assets Liabilities Outstanding Loans: $100,0

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Consider the following balance sheets of two banks. These two banks have equal amounts of assets but are leveraged differently. Assume that there is no regulatory capital requirement. Balance Sheet of Arch Bank Assets Liabilities Outstanding Loans: $100,0

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Consider the following balance sheets of two banks. These two banks have equal amounts of assets but are leveraged differently. Assume that there is no regulatory capital requirement. Balance Sheet of Arch Bank Assets Liabilities Outstanding Loans: $100,0

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Consider the following balance sheets of two banks. These two banks have equal amounts of assets but are leveraged differently. Assume that there is no regulatory capital requirement. Balance Sheet of Arch Bank Assets Liabilities Outstanding Loans: $100,0