The primary advantage of a holding company, that permits the firm to control a large amount of assets with a relatively small dollar investment is known as ________.

Question

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The leverage effect refers to the ability of a holding company to control a large amount of assets with a relatively small dollar investment, which is the primary advantage of a holding company. This is because the holding company can use the assets of its subsidiaries to secure loans and other forms of financing, which allows it to grow its portfolio without having to commit a significant amount of its own capital.

The Primary Advantage of a Holding Company, That Permits the Firm