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

question 51

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 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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Definitions:

Uvula

The uvula is a small, fleshy extension at the back of the soft palate above the throat, playing roles in speech and the triggering of the gag reflex.

Nasopharynx

The upper part of the throat behind the nose, serving as an airway in the respiratory system and a pathway for food and liquids.

Nasal Conchae

Curved bony structures in the nasal cavity that help to moisten, warm, and filter the air we breathe.

Soft Palate

The mobile, fleshy part at the back of the roof of the mouth that separates the oral cavity from the nasopharynx during swallowing and speech.