Which Statement Is Not Correct About Financial Leverage for a $300,000

question 31

Multiple Choice

Which statement is not correct about financial leverage for a $300,000 investment versus a $100,000 investment?

• A)The probability of success is the same under both investment options.
• B)The payout will be 3 times higher or 3 times lower with the larger investment.
• C)The probability of success is the 3 times greater with the larger investment.
• D)The larger investment increases the return on equity but also faces a greater potential for loss.

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