A Haircut of 20% Means That

question 15

Multiple Choice

A haircut of 20% means that

• A) A bond with a market value of $100 is considered to be worth $80 when used to satisfy a collateral request
• B) A bond with a face value of $100 is considered to be worth $80 when used to satisfy a collateral request
• C) A bond with a market value of $100 is considered to be worth $83.3 when used to satisfy a collateral request
• D) A bond with a face value of $100 is considered to be worth $83.3 when used to satisfy a collateral request

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Definitions:

Reindeer

A large type of deer living in the Arctic and Subarctic regions known for their migration in large herds and their domestication in some areas.

Characteristic Climate

The average weather conditions, including temperature, precipitation, and wind, typically found in a particular region over a long period.

Ecosystems

Communities of living organisms interacting with their physical environment, functioning as a unit in nature.

Biome

A large community of plants and animals that occupies a distinct region defined by its climate and vegetation.