| TABLE 1 | THE MAGNIFIED RISK OF LEVERAGED INVESTMENTS |
| Nonleveraged Investment | Leveraged Investment |
| Initial account value: $10,000 | Initial account value: $10,000 |
| Leverage ratio: 1:1 | Leverage ratio: 10:1 |
| Value of invested assets: $10,000 ($10,000 × 1) | Value of invested assets: $100,000 ($10,000 × 10) |
| Event: 10% drop in invested assets | Event: 10% drop in invested assets |
| Drop in value of investment: $1,000 ($10,000 × 10%) | Drop in value of investment: $10,000 ($100,000 × 10%) |
| New account value: $9,000 | New account value: $0 |