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The Scaled-Down Pyramid

The patterns used to compound positions can be represented geometrically as pyramids. The standard pyramid, or uprigbt pyramid, has a larger base than its top. The largest portion of profits are developed early and an adverse price move is not … Continue reading

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Financial risk

Financial risk is the uncertainty introduced by the method by which the firm finances its investments. If a firm uses only common stock to finance investments, it incurs only business risk. If a firm borrows money to finance investments, it … Continue reading

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