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Financing the purchase of an investment in real estate with a mortgage at the time of borrowing...

Question:

Financing the purchase of an investment in real estate with a mortgage at the time of borrowing at a low rate of interest and investing in assets that earn more than what they cost puts you ahead of the game due to the concept of:

a. leverage.

b. diversification.

c. return on investment.

d. price appreciation.

Financing Terminology

When dealing with finance, it is important to have knowledge about the terminology used. By having that knowledge, an individual can provide insight into management and leaders on important financial decisions for the business.

Answer and Explanation:

The correct answer to the question is a. leverage. Leverage is the concept of using one investment to make another investment, and thus come out ahead in the total investment.


Learn more about this topic:

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What Is Financing? - Definition & Types

from Corporate Finance: Help & Review

Chapter 8 / Lesson 7
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