a) Draw a demand-supply diagram of an asset, which is initially perceived as risky. Supposethe asset in question is now perceived as risk-free. How will your demand-supply diagramchange? Show the change in the same diagram. Briefly explain.b) What happens when

| April 14, 2018

a) Draw a demand-supply diagram of an asset, which is initially perceived as risky. Supposethe asset in question is now perceived as risk-free. How will your demand-supply diagramchange? Show the change in the same diagram. Briefly explain.b) What happens when the asset in “part a”, is suddenly revealed to be risky?c) Suppose the banking sector raises money by selling such financial assets to investors. Forthe banking sector as well as for investors in general, discuss the … 

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