Quick Finance Tip – Leveraged Position In The Risky Portfolio

​By taking more risk, an investor will move to the right of the market portfolio (graphically speaking) by borrowing money. As one moves further to the right, an increasing amount of money is being invested in the market, meaning that there is a negative investment in the risk-free asset. Analogously, it is ultimately putting more weight towards one end of the seesaw vs. the other. This is referred as a “leveraged position” in the risky portfolio.