Leverage Means

question 32

Multiple Choice

Leverage means:

• A)using borrowed money to magnify returns.
• B)paying only cash for any investment purchase.
• C)investing in highly speculative securities.
• D)purchasing securities at a premium price.
• E)selling investments before their maturity.

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Definitions:

Binder

A written, temporary insurance policy.

Policy

In insurance law, a contract for insurance coverage. The policy spells out the precise terms and conditions as to what will and will not be covered under the contract.

Potential Loss

The possibility of experiencing a negative outcome, often calculated in terms of financial impact.

Risk

A prediction concerning potential loss based on known and unknown factors.