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Economics

Assume that for $1000 you can purchase a stock whose value is equally likely to fall to $700 or rise to $1400.(The expected value of this investment is $1050) Suppose that in addition to investing $1000 of your own, you borrow $1000 and invest a total of $2000. Show that this leverage doubles the expected return.

Please express the answer as detailed as possilbe. Giving the definition of the term would be great. Thank you so much!

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M91952267

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