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Economics

Suppose a bank purchases a bond for $X using discount rate i%. Now suppose that after purchasing the bond, the bank decreases the discount rate on that bond. Ceteris paribus, it follows that:

A. the value of the bank's liability will increase
B. the value of the bank's liability will decrease
C. the value of the bank's asset will increase
D. The bank's capital will increase

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Microeconomics, Economics

Category:- Microeconomics
Reference No.:- M968894

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