Explanation:
The leverage ratio for a margin position is calculated as the ratio of the total value of the position to the equity value invested in it. This measure helps assess the level of leverage used in the investment. Options B and C incorrectly include the margin loan or the total of the margin loan and equity, which do not align with the definition of the leverage ratio.
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For a security position purchased on margin, the leverage ratio is the ratio of the value of the position to:
A
the equity value in the position.
B
the margin loan amount in the position.
C
the total of the margin loan and equity in the position.