|visits||member for||2 years|
|seen||Dec 16 '13 at 21:00|
Why use leverage when it does not improve the risk/reward ratio?
The premise of your question is flawed. The ratio of risk/reward is invariant to leverage only when you define reward as arithmetic mean return. But your end-of-period capital is the geometric mean of returns. After you reflect on that for a moment, read up on the kelly criterion and you'll learn that there is in theory an "optimal" level of leverage for any investment with a + expected return.