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To: Jean M. Gauthier who wrote (21473)4/23/1999 8:46:00 PM
From: taxman  Respond to of 74651
 
"pls explain"

a mutual fund which is 20% invested in the s & p index and 80% in bonds would have relatively low volatility.

so if you were investing 2,000, you might want to borrow another 8,000 and invest that to increase the volatility to one that is 100% invested in the s & p index.

if, however, the fund invested in s & p index options, instead of the s & p index, the options would provide additional leverage.

does that help?

regards