Question

During periods of inflation, $10,000 today will be worth less tomorrow. this is an example of what type of risk?

Answer 1

During periods of inflation, $10,000 today will be worth less tomorrow. this is an example of the type of risk is Buying power.

What is buying power?

• The funds an investor has available to purchase assets in a trading environment are known as buying power, which is often referred to as surplus equity.
• The sum of the funds in the brokerage account plus all available margin is the buying power.
• Buying power can signify different things depending on the situation or the business, but in finance it describes the amount of money that investors have access to in order to buy securities in a leveraged account.

Due to the fact that traders borrow money based on the amount of cash in their brokerage account, this is known as a margin account.

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