Question

What is leverage ? Explain its type, effects
and limitation​

Answer 1

Leverage is an investment technique of using borrowed money, precisely, the use of different financial instruments or borrowed capital to maximise an investment's potential return. Also, leverage may refer to the amount of debt a firm uses to fund assets.

Answer 2

heya mate..... ✌

Answer:

• In finance, leverage is a strategy that companies use to increase assets, cash flows, and returns, though it can also magnify losses.

• There are two main types of leverage: financial and operating.

To increase financial leverage, a firm may borrow capital through issuing fixed-income securities.

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