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Homework answers / question archive / The benefit of debt is that you can: A
The benefit of debt is that you can:
A. use money later rather than now.
B. defer payment of interest.
C. own an asset without paying for it.
D. use it to store wealth.
E. use other people's money.
The correct answer is (E) use other people's money.
Debt is a loan that is granted by financial institutions among other institutions to individuals or to other institutions. Debt is beneficial since incase one has an investment opportunity but no adequate resources to pursue that investment opportunity, then the debt is one of the options that are available to an investor. Debt is the money that is deposited by the individuals in banks. Therefore, when one uses debt to finances operations they are using other people's money.
