Ursa and Liam each invest in the same asset: ·  Ursa invests $10,000 of her own money ·  Liam invests $10,000 of his own money + $90,000 borrowed at 5% interest After one year, the asset return is 5%. Which of the following statements is correct?单项选择题

题目图片
A

a. Liam earns a higher return than Ursa because leverage magnifies returns whenever returns are positive

B

b. Liam earns a lower return than Ursa because interest reduces his profit

C

c. Ursa and Liam earn the same return on equity, even though Liam invests more money

D

d. Liam earns zero return because all gains are offset by interest costs

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