Văn bản từ polinazhdanova -
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How can the text below be improved and corrected? Thank you.
- * What is the main risk of buying or borrowing capital to invest in an asset?
- The main risk of buying capital to invest in an asset is that the asset could lose its value over time.
- For example, we both share stocks and as an investor in the company’s capital we share ownership of the company thus we also share its risks.
- If this company’s profit declines our asset would drop in market cost.
- The main risk of borrowing capital to invest in an asset is that we could not afford to pay off the debt.
- Since borrowing enables us to invest in an asset without first owning capital, before we paid off the whole debt we not really own an asset.
- In case our stream of income, such as wages or rental income, declined or even ceased we could not afford to pay off a debt thus we in risk to lost the assent and our previous debt payments.
- polinazhdanova
February 2021
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