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Leverage, securities calculation watch

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    Hey all

    I'm wondering if someone could direct me how to tackle this problem?


    Assume that Bank A buys 150£ worth of government bonds with a leverage of 15
    to 1, and targets a constant leverage. When the price of purchased securities fall to
    145, the bank would

    a) Buy securities worth 70£.
    b) Sell securities worth 70£.
    c) Buy securities worth 75£.
    d) Sell securities worth 75£.
    e) None of the above.

    Thanks
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    Hi there,

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