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Intermediate
A family office uses total return swaps to build large synthetic equity exposure without timely public disclosure. When the stock prices fall, prime brokers liquidate collateral simultaneously. Which event and risk lesson best fit?
Lehman Brothers in 2008, highlighting only sovereign risk.
Archegos in 2021, highlighting leverage, counterparty credit exposure, concentration, and disclosure gaps.
Knight Capital in 2012, highlighting only algorithmic order-entry errors.
Enron, highlighting only VaR backtesting failures.
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