Because an investor borrowing funds for margin trading pays a fixed rate to borrow funds from his broker,the margin trading returns are magnifies the returns on the assets value.

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Margin trading allows investors to borrow funds from their broker to trade assets. The interest rate paid on the borrowed funds is fixed, which magnifies the potential returns on the asset's value. However, the risks are also amplified as losses can exceed the investor's initial investment.

Because an Investor Borrowing Funds for Margin Trading Pays a Fixed