A ﬁnancial lease in which the lessor borrows a substantial fraction of the cost of the leased asset on a nonrecourse basis is called a(n) ___________.

Question

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A leveraged lease is a type of financial lease in which the lessor borrows a substantial fraction of the cost of the leased asset on a nonrecourse basis. This means that the lender cannot go after the lessor's other assets if the lease payments are not made. The lessor uses the loan to finance the purchase of the asset and then leases it to the lessee. The lease payments from the lessee are used to pay back the loan with interest, and any remaining profits are split between the lessor and the lender.

A ﬁNancial Lease in Which the Lessor Borrows a Substantial