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Shortly after the Federal Reserve arranged the purchase of Bear Stearns by JPMorgan Chase, the Wall Street Journal recounted the events that led to the extraordinarily low price that JPMorgan paid for Bear Stearns: "The bank was mulling a price of $4 or $5 a share.

‘That sounds high to me,' Mr. Paulson said. ‘I think this should be done at a low price.'"

a. Why did Treasury Secretary Paulson want Bear Stearns to sell for such a low price?

b. Why was the decision by the Fed to orchestrate the purchase of Bear Stearns so controversial?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92057870

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