Financial leverage refers to the use of borrowed funds to increase an investment's potential return. While it can amplify returns, it simultaneously increases the risk of loss.
Leverage involves the use of borrowed funds to increase an investor's purchasing power and potentially amplify the profitability of an investment. It can result in higher returns but also carries additional risk.
Positive leverage refers to the use of borrowed funds that enhances the return on investment. It indicates that the cost of borrowing is lower than the return generated by the investment.
