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Basic Question 12 of 16
What is the leverage factor associated with a 40% margin rate?
B. 2.5
C. 40.0
A. 1.4
B. 2.5
C. 40.0
User Contributed Comments 4
| User | Comment |
|---|---|
| kalps | Leverage factor = total assets / Equity 100/40 |
| sarath | Leverage factor = 1/margin rate.. |
| irapp92 | @kalps thanks, it's comments like those that really make analystnotes worth it.. |
| khalifa92 | Leverage factor: the multiplier of using leverage on investment. |
I am using your study notes and I know of at least 5 other friends of mine who used it and passed the exam last Dec. Keep up your great work!
Barnes
Learning Outcome Statements
compare positions an investor can take in an asset
calculate and interpret the leverage ratio, the rate of return on a margin transaction, and the security price at which the investor would receive a margin call
CFA® 2024 Level I Curriculum, Volume 3, Module 1.