Trading on the equity refers to using money borrowed at fixed interest rates to try to enhance the rate of return on common shareholders' equity.

Question

Quizplus · Accepted Answer

Trading on the equity involves borrowing money at a fixed interest rate and using it to invest in a way that increases the return on equity for common shareholders. This strategy can be risky, as it can amplify both gains and losses.

Trading on the Equity Refers to Using Money Borrowed at Fixed