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On the nature of financial leverage

arXiv.org, 2012-06

2012. This work is published under http://arxiv.org/licenses/nonexclusive-distrib/1.0/ (the “License”). Notwithstanding the ProQuest Terms and Conditions, you may use this content in accordance with the terms of the License. ;http://arxiv.org/licenses/nonexclusive-distrib/1.0 ;EISSN: 2331-8422 ;DOI: 10.48550/arxiv.1009.2896

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  • Title:
    On the nature of financial leverage
  • Author: Ivanenko, Yaroslav
  • Subjects: Decision making ; Decision theory ; Financial leverage ; Phenomenology ; Quantitative Finance - General Finance ; Quantitative Finance - Portfolio Management ; Quantitative Finance - Risk Management
  • Is Part Of: arXiv.org, 2012-06
  • Description: The article presents a translation of some widespread financial terminology into the language of decision theory. For instance, financial leverage can be regarded as an object of choice or a decision. We show how the optics of decision theory allows perceiving the recently introduced metrics of see-through-leverage, which proved to be very useful in understanding the phenomenology of the recent economic crisis. The importance for practical decision making of specification of the statistical regularity of the random phenomena at hand as well as of the rationality class of the decision maker is discussed.
  • Publisher: Ithaca: Cornell University Library, arXiv.org
  • Language: English
  • Identifier: EISSN: 2331-8422
    DOI: 10.48550/arxiv.1009.2896
  • Source: Freely Accessible Journals
    arXiv.org
    ROAD: Directory of Open Access Scholarly Resources
    ProQuest Central

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