2007-03-18 13:11:19 · 2 answers · asked by Anonymous in Business & Finance ➔ Other - Business & Finance
Risk leverage can be used for bargaining power, as the amount of risk tends to affect the price.
One example of this would be if someone wanted me to accept a high risk job, it could justify a higher asking price.
Another more direct example is how Insco's charge higher premiums to high risk drivers, once again the risk leverages the price.
It isn't always that higher risk drives the price up, in some instances it could drive the price down, such as might be the case in the selling price of a car that is notorious for having problems, hence risk affects the price, or leverages it.
2007-03-18 13:21:21 · answer #1 · answered by netthiefx 5 · 0⤊ 0⤋
An attempt to spread or hedge risk.
2007-03-18 13:18:04 · answer #2 · answered by econgal 5 · 0⤊ 0⤋