FVPV

brafique Wrote:
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> > Diff cost of lending and borrowing
> ==> Diminish returns due to the reverse kink
>
>
> Could somone please explain this one?


I believe, and someone please correct me if I'm wrong, it is because the higher borrowing rate would eat into the return of a borrowing portfolio which creates a kink in the line as opposed to a straight line. I assume brafique referred to it as a reverse kink when compared to one of the chart in econ (demand curve for an oligopoly maybe?) which goes in the other direction.