In Finance, Leverage Is Using

question 115

Multiple Choice

In finance, leverage is using:

• A) borrowed money to pay for investments.
• B) the equity one owns to pay for investments planned in the future.
• C) predicted earnings to pay for current investments.
• D) forecasted future earnings to pay for current loans.

---

Definitions:

Third Party

An entity or individual that is involved indirectly or is outside the main two parties engaged in a transaction or legal matter.

Principal

A party who has the primary responsibility in a transaction or legal action, or the amount of money originally invested or loaned, excluding any profits or interest.

Agent

An individual or entity authorized to act on behalf of another person, known as the principal, in legal or business matters.

Incorporation

The process of legally declaring a corporate entity as separate from its owners.