When investors use leverage in their own portfolios to adjust the leverage choice made by the firm,it is referred to as:
A)outside debt.
B)retained earnings.
C)homemade leverage.
D)payout ratio.
E)portfolio rebalancing.

Question

Quizplus · Accepted Answer

When investors use their own leverage to adjust the firm's leverage, it is referred to as homemade leverage. This is because investors are essentially "making their own" leverage choices instead of relying solely on the firm's decisions. Options A, B, D, and E are not relevant to this concept.

When Investors Use Leverage in Their Own Portfolios to Adjust