On the whole, when financial markets are _______, leverage _______; when markets are _______, leverage _______.

Question

Quizplus · Accepted Answer

When financial markets are expanding, leverage multiplies the gains because borrowing money to invest can significantly increase the return on investment if the value of the investments goes up. Conversely, when markets are crashing, leverage magnifies the losses because the same borrowed money can lead to much greater losses if the value of investments falls.

On the Whole, When Financial Markets Are _______, Leverage _______;

On the Whole, When Financial Markets Are _, Leverage _;