Homemade leverage
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Suppose an investor is unhappy with River Cruises decision to borrow $250,000. What modifications can she make to her own investment portfolio to offset the effects of the firm's additional borrowing?
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The solution goes into a great amount of detail related to Homemade leverage. The response does an very good job of responding to the questions being asked and provide clear and concise answers to the problem. This is a great response for students looking to better understand this topic. Overall, an excellent response.
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The investor can easily undo the effects of additional borrowing by using the concept of homemade leverage. In this particular ...
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