An Investor Can Create the Effect of Leverage on His/her

question 80

Multiple Choice

An investor can create the effect of leverage on his/her account by

• A)buying equity of a levered firm.
• B)investing in risk-free debt like T-bills.
• C)borrowing on his/her own account.
• D)buying equity of a levered firm and borrowing on his/her own account.

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Definitions:

Consciousness

A state where an individual is conscious of their own life, senses, thoughts, environment, and experiences.

Self-Awareness

The conscious knowledge of one's own character, feelings, motives, and desires.

Mental Processes

Operations of the mind, including thought, perception, memory, and decision-making.

Depressant

A drug that reduces the functioning of the nervous system, often prescribed to reduce anxiety and induce sleep.