What would you consider leverage? I know this may sound like a basic question but I have spoken with several industry professionals with a significant amount of experience and all of them have a different definition of leverage.
There are some that consider collateralized financing and investing in a low risk investment as not leverage. Collateralized financing being borrowing by "lending securities", reverse repo, etc., where one essentially has "pledged" assets to borrow money. And "low risk" investments being money market, commercial paper, treasury bills, etc.
It seems to me like this is still leverage, albeit low risk leverage but nevertheless leverage. Should this type of leverage be considered utilization of leverage limits that are defined as a % of capital/assets? Would love to hear various opinions, justification, and theories by various investment professionals. Examples would be appreciated.