Ask Question
BusinessBusiness
10 August, 03:20

Leverage increases the total size of the gain or loss from an investment, not just the percentage rate of return on the part of the investment amount that was not borrowed

+4
Answers (1)
  1. 10 August, 04:20
    0
    Given statement is True that Leverage increases the total size of the gain or loss from an investment, not just the percentage rate of return on the part of the investment amount that was not borrowed

    Explanation:

    Leverage means using borrowed funds if one wants to buy a portion of the securities in a portfolio. This increases the return on investment.

    If the return on investment is 'greater' than the cost of the funds that are borrowed then the investor is greatly affected. Leverage is profitable when the earnings are greater than the cost of borrowing.

    But, leverage may fail in case returns are less than the borrowing costs. Leverage would bring both good and bad results. Thus, the given statement which says that leverage would increase either loss or gain from an investment is correct.
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “Leverage increases the total size of the gain or loss from an investment, not just the percentage rate of return on the part of the ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers
You Might be Interested in
The chapter compared and contrasted the interdisciplinary research process to the disciplinary approach (in a general sense) and argued that both have utility, depending on the problem.
Answers (1)
Suppose that in an attempt to induce citizens to conserve energy, the government enacts regulations requiring all air conditioners to be more efficient in their use of electricity.
Answers (1)
A local farmer grows and sells tomatoes and beans to the local grocers. look at the farmer's business as a system. in which category do the tomatoes, beans, squash, profits, and losses fall?
Answers (1)
What aspect of America were William Watts and Lloyd Free referring to when they labeled it "the country of individualism par excellence"?
Answers (1)
Which of the following is NOT an example of a transaction? A. Getting a paycheck from your job for the hours you worked. B. Paying a restaurant bill at the end of your dinner, C. Giving your friend a gift for their birthday. D.
Answers (1)
New Questions in Business
who talked about this clue "it will gain you more knowledge, intensify your soft skills, strong work ethics and grow your network" what is it?
Answers (1)
Which of the following would most likely be classified as a current liability? a. bond payable b. two-year note payable c. mortgage payable d. unearned rent
Answers (1)
In the long run, each firm in a competitive industry earns A. zero accounting profits. B. zero economic profits. C. positive, negative, or zero economic profits. D. positive economic profits.
Answers (1)
Methods that FNB can use to compete with other bankes in SA
Answers (1)
Discuss how SAS has been successful in cultivating and enhancing employees skills. In what ways are SAS's organizational approaches targeted to ensuring job satisfaction? Discuss if other companies would be successful in adopting the "SAS approach.
Answers (1)
Home » Business » Leverage increases the total size of the gain or loss from an investment, not just the percentage rate of return on the part of the investment amount that was not borrowed
Sign Up Forgot Password?