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1. Which of the following statements is not true with respect to the use of debt in an investment context a. Increased leverage is beneficial

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1. Which of the following statements is not true with respect to the use of debt in an investment context a. Increased leverage is beneficial when the investment return is higher than the rate of interest b. Increased leverage increases a fund's risk of financial distress c. Increased leverage will always result in a higher return d. Increased leverage will increase the volatility of investment portfolios returns 2. Which of the following isn't a contributory factor behind the heightened default risk of commercial real estate loan portfolios versus residential ones? a. Reduced loan diversity b. Greater loan size c. Refinancing/balloon risk d. More common use of non-recourse lending

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