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Taking leverage makes sense only if the expected value is positive. If you don't know it, only if marginal utility of potential loss is either smaller or equal
by maurycy 18y ago
Taking leverage makes sense only if the expected value is positive.
If you don't know it, only if marginal utility of potential loss is either smaller or equal to potential gain.
It is important, though, to not confuse potential loss with volatility. :-)