Which of the Following Statements Are Correct in Regards to Financial

question 135

Multiple Choice

Which of the following statements are correct in regards to financial leverage?

• A) Financial leverage is said to be 'negative' if the rate of return is higher than the borrowing rate.
• B) Financial leverage is said to be 'positive' if the rate of return is lower than the rate of borrowing.
• C) Financial leverage is borrowing at one rate and investing at a different rate.
• D) Financial leverage can decrease the return on equity.

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Definitions:

Perceptual Accuracy

The extent to which one's observations or judgments mirror the true state of affairs or real characteristics of objects or situations.

Interview Error

Mistakes or biases that can occur during the interviewing process, affecting the accuracy or fairness of the interview outcomes.

High-Status Employees

Workers who hold positions of authority or esteem within an organization, often associated with higher pay or more influence.

Internal Causes

Factors or reasons originating within an individual or organization that lead to a specific outcome or behavior.