Leveraging your portfolio: (check all that apply) O ption A :Allows you increase your return on equity,
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Question:
Leveraging your portfolio: (check all that apply)
Option A :Allows you increase your return on equity, magnifying positive (or negative) returns by borrowing money.
Option B: Increases your default risk by magnifying the standard deviation (risk) of your portfolio.
Option C: Does not increase the standard deviation of your portfolio, since the borrowed money is risk free and therefore has a standard deviation of zero.
Option D: Increases systematic risk within your portfolio, that is the uncertainty inherent to the market as a whole and which cannot be diversified.
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