What is a positive wear?
Positive transmission is a financial situation where the net financing costs are lower than the return, making profits for the person who holds the position. When someone has a positive transmission, it is usually a position that is worth keeping because it earns money for the investor. On the other hand, the negative transmission costs more to finance than it generates, and it is not a good position to maintain, because it costs money for the investor and will continue until the investor can get out of position.
This term is often used in the context of more leg investment. Every “leg” is a different investment and the goal is to earn spreading between the legs. This allows the investor to lose money on one leg, earn money after another and use the difference as a profit. For example, someone could take a 5% loan and invest money in a 7% bond. The difference of 2% would create positive transmission and motivation for the investor to maintain position.
in the evaluation ofinvestics, people are thinking about whether they will exist positive orNegative carries, and whether there are investments that could be hit to create a positive transmission by assembling more legs to support investment. It can make sense to borrow funds from one source to pay off another loan, for example and use the initial borrowed funds for another investment.
The composite site can be woven when someone is trying to take a positive position and profit from investment. This can sometimes bounce for the investor. If one leg of the investment collapses, the investor does not have to earn profit and could get into trouble. This should also be considered in assessing risks and benefits of potential investment, as positive transport can be very risky and the investor could decide that the related risks are not worth potential profits.
people rely on Raduod of financial planners and other people who are familiar with investment decisions can be offered severalOptions for positions they can use to create a positive transmission. These options will be submitted to information on possible risks that will allow the person to make an informed choice of the best investments in which they can participate. Many factors can affect risks, from the age of the investor to the general market condition. For example, older investors generally prefer more conservative investments, because if they lose money, they may not have time back.