Financial Leverage Is Less of a Factor in Real Estate

question 12

True/False

Financial leverage is less of a factor in real estate investment returns than with other types of investments.

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Definitions:

Thorndike's Law

The principle that behaviors followed by favorable consequences become more likely, and behaviors followed by unfavorable consequences become less likely, known as the law of effect.

Effect

Refers to the outcome or impact that results from a particular cause or action.

Positive Reinforcement

A process in behavior reinforcement where a behavior is encouraged by rewarding a desirable outcome.

Negative Reinforcement

A behavioral principle where the removal of an unpleasant stimulus following a desired behavior strengthens that behavior.