c) At t=0, what amount L, can agent A borrow from agent B in a repo trade at t=0 and what is the haircut? [2 Points] Suppose /= =PA=P:/=0.4. What amount LA can agent A borrow from agent B in a repo trade at t=0 and what is the haircut? [4 Points] Question 2 [22 points] Consider the same economy as above. Now suppose agent C can produce private information about the true realization x at t=1 at the cost y. Suppose /-=PA-91-1. Suppose 1=4. a) Suppose agent B proposes to borrow L, =50 by posting the bond. Does agent C always lend? [3 Points] b) What is the maximum amount L, that agent B can borrow with probability 1? What is the haircut? [4 Points] c) Suppose agent B keeps proposing L -E[x]. What is the expected amount agent B can borrow? [2 Points] At t=0, what amount LA can agent A borrow from agent B in a repo trade at t=0 and what is the haircut in equilibrium? [3 Points] Suppose y=23. e) What is the maximum amount L, that agent B can borrow with probability 1? What is the haircut? [2 Points] f) At t=0, what amount L, can agent A borrow from agent B in a repo trade at t=0 and what is the haircut? [2 Points] g) Suppose that :=0.8 (and not @,;=1). What is the maximum amount Ly that agent B can borrow with probability 1? What is the haircut for agent A? [6 Points]