Both Operating and Financial Leverage Result in the Magnification of Return

question 39

True/False

Both operating and financial leverage result in the magnification of return as well as risk.

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Definitions:

Guthrie

Edwin Ray Guthrie was a behavioral psychologist known for his theory that learning is a direct association between stimulus and response, occurring in a single trial without reinforcement.

Reward Reduction

A decrease in the magnitude or frequency of a rewarding stimulus following a behavior, which can affect the future likelihood of that behavior.

Environmental Stimuli

External factors or changes in the environment that can influence an individual's behavior or physiological responses.

Temper Tantrum

An emotional outburst, typically characterized by crying, screaming, defiance, and anger, common among toddlers as a way to express frustration or attempt to assert control.