If the Assets in Which Borrowed Funds Are Invested Are

question 142

True/False

If the assets in which borrowed funds are invested are able to earn a rate of return greater than the interest rate required by the lender,then financial leverage is positive.

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Definitions:

Writing Requirement

A legal principle that certain agreements or contracts must be in writing to be legally binding, especially relevant in real estate transactions and contracts that cannot be performed within one year.

Statute of Frauds

A legal principle that requires certain contracts to be in writing and signed by the parties involved to be enforceable.

Signature Requirement

A legal or regulatory necessity for signatures on documents to validate their authenticity or to indicate agreement to terms.

Statute of Frauds

A rule of law requiring specific kinds of agreements to be documented in writing in order to be legally binding.