While leverage can be a useful tool for companies to maximize growth opportunities, it can also be dangerous if not managed properly. This is especially true for larger companies who may not understand the risks involved. The other options are not accurate - leverage has not been outlawed and while it played a role in the 2008 recession, it was not the single reason for it.

Solved

Leverage

Question 33

Multiple Choice

Leverage:

A) is a dangerous tool,especially for big companies who do not understand its risk.
B) has been outlawed since 2010.
C) is often cited as the single reason for the Great Recession of 2008.
D) All of these statements are true.

Correct Answer: