Magnifying Risk: Leverage & Nonlinearity a. Explain how the non-recourse loan creates a nonlinear risk. b. Explain how the combination of no-money down loans and non-recourse create leverage on top of nonlinear payoffs. c. How does this combination lead to asset bubbles? d. Using an option framework, show your investment is a type of option strategy, where i. The underlying is the portfolio loss ii. The options value is the stated yield of the structured product iii. The options strike is the attachment and/or detachment point