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Solve the problem.
-Given , define , and such that .
Systemic Risk
The risk of collapse of an entire financial system or entire market, due to the failure of a single entity or group.
Financial Crisis
A situation where the value of financial institutions or assets drops rapidly, leading to a loss of confidence, insolvencies, and liquidity shortages.
Collateralized Debt Obligations
A type of structured asset-backed security (ABS) with multiple layers of debt obligations typically secured by a pool of loans or other assets.
Promissory Note
A financial instrument comprising a written promise by one party to pay another party a definite sum of money either on demand or at a specified future date.
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