Carlos holds a portfolio of stocks and bonds. He is planning to buy a real estate property worth $150,000. He can use financial leverage to make this purchase by:

Question

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Option B is the best choice as it allows Carlos to take advantage of financial leverage without selling off a significant portion of his portfolio. By taking a personal loan worth $100,000 and selling bonds worth $50,000 from his portfolio, Carlos can use $150,000 to make the real estate purchase while still holding onto a portion of his portfolio. Option A requires Carlos to sell off half of his portfolio and still pay $75,000 in cash. Option C requires him to sell off more of his portfolio than necessary and pay some of the purchase price in cash. Option D requires him to sell off a significant portion of his portfolio and still pay $100,000 in cash. Option E requires him to use all of his savings, leaving him with no emergency funds or liquid assets.

Carlos Holds a Portfolio of Stocks and Bonds