Leverage Involves

question 46

Multiple Choice

Leverage involves:

• 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:

Absolute Advantage

The ability of a party to produce a greater quantity of a good, product, or service than competitors, using the same amount of resources.

Donuts

A type of fried dough confection or dessert food, often sweetened or glazed.

Comparative Advantage

The skillfulness of an individual or team in performing a particular economic function more proficiently than another task.

Bushels

A unit of volume that is used in dry commodities trading, commonly used in agriculture for measuring grains.