How does collateral affect return required by investors, Financial Accounting

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How does collateral affect return required by investors

Response to the following questions:

1. How does collateral affect a security's riskiness? How does collateral affect the return required by investors?

2. Suppose individual income tax rates increase. Ignoring any other changes that may be made in the tax law, how should this affect the demand for municipal bonds?

If possible, please give examples to better understand your answers.

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Financial Accounting: How does collateral affect return required by investors

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