n NISM Certifications
XXI NISM Series XXI-A
Medium

'Leverage' in investing refers to:

Practice question from NISM XXI A for PMS - Mock Test 5 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. Using borrowed funds to increase the potential return

    Correct answer

  2. B

    Reducing the exposure to risk

  3. C

    Diversifying across asset classes

  4. D

    Investing solely in equities

Why this is the answer

Leverage involves borrowing capital to amplify investment exposure and potential gains (and losses).

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