Financial Leverage Will Always Be Which of the Following

question 25

Multiple Choice

Financial leverage will always be which of the following?

• A) Positive.
• B) Negative.
• C) Either positive or negative.
• D) Positive, negative, or zero.

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Definitions:

Dividend

Money distributed by a corporation to its shareholders, often as a share of the earnings.

Reward-to-volatility Ratio

A ratio used to assess the return of an investment relative to its risk, calculated by dividing the excess return of an investment by its standard deviation.

Standard Deviation

A statistical measure of the dispersion of a set of data from its mean, often used to quantify the risk associated with a particular investment.

Treasury Bills

Short-term government securities issued at a discount from the face value and mature in one year or less, representing a secure, low-risk investment option.