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:

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Laptop

A portable personal computer with a clamshell form factor, suitable for mobile use and equipped with a keyboard and screen.

Id

In psychoanalytic theory, a part of the mind that is the source of instinctual impulses and demands for immediate satisfaction of basic needs.

Ego

The part of the psyche that mediates between the conscious, the unconscious, and reality, functioning in both conscious thought and behavior regulation.