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The Financial leverage course deals with a mechanism well used in financial markets by both individuals and financial institutions. The use of leverage allows investors to increase the size of their market positions. It also increases the (expected) return of their investment although the two other characteristics - risk and liquidity - are also impacted (increase in risk and decrease in liquidity).
This course will answer the following questions: what is financial leverage? How can you leverage your market position by buying and selling on credit? What is the implication of leverage in terms of (expected) return, risk and liquidity?
The Financial leverage course will be the opportunity to work on key concepts in finance: (expected) return, risk and liquidity. Although the emphasis when using leverage is put on (expected) return, we will show that the two other characteristics of the investment - risk and liquidity - are also impacted (increase in risk and decrease in liquidity).
The Financial leverage course will allow you to learn in practice the following points of finance:
After or during this course, you can practice what you learned by launching the simulations associated to this course.
Your grade for this course takes into account the following elements:
Professor François Longin
« Financial leverage is an interesting example to illustrate the triptych: (expected) return, risk and liquidity. Very important concept to understand the world of finance. »