All Other Things Being Equal,which of the Following Best Describes

question 32

Multiple Choice

All other things being equal,which of the following best describes the effects of leverage on an investment's risk-return characteristics (assuming the expected return is greater than the lending rate) ?

• A)Lower expected return,lower risk
• B)Lower expected return,higher risk
• C)Higher average return,higher risk
• D)Higher average return,lower risk
• E)Risk-return characteristics have no role in investment decision making