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If the Buyer Commits $100,000 of His or Her Own

Question 44

Multiple Choice

If the buyer commits $100,000 of his or her own funds and borrows $900,000 to purchase $1 million in assets, then the leverage ratio is

A) 10 to 1.
B) 25 to 1.
C) 9 to 1.
D) 5 to 1.

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