سؤال قراءة ستيب محلول — فهم التفاصيل (تدريب 5951)

(1) From the mid-1990s, financial institutions were putting more and more money into new kinds of very risky investments. Some of these investments are very difficult to understand, but the particular investments are a less important factor than the technique called leverage that was (and is used to make those investments. (2) So, what is leverage? In essence, it just refers to the practice of borrowing money to make an investment. To see how it works and to see both how attractive it can seem and how extremely risky it is, let's compare leverage with an old-fashioned investment. Say you have $20,000 to invest in property. You buy land worth $20,000. Over a period of time its market value increases by 10%. You make $2,000. In the old days you might have been happy with that. $2,000 is nice, but more would be better, wouldn't it? So why not leverage? (3) If you have $20,000, you should be able to persuade a financial institution to lend you a lot more. Let's say you are loaned 19 times your original amount, making the total sum $400,000. Wow! So, you invest $400,000 in property. The value increases by 10%. You sell the property and count your profits and find that you have made $40,000. Instead of the 10% profit you would have made with the old-fashioned technique, you have made 200%!! Of course, you have to pay interest on the money you borrowed, and that might cut your profits in half, but 100% profit ($20,000) is still way, way better than 10% ($2,000).