The correct answer is: B. May be beneficial.
Trading on equity is the practice of using borrowed money to purchase assets. This can be a risky practice, as it can lead to large losses if the assets decline in value. However, it can also be a profitable practice, as it allows investors to leverage their capital and earn a higher return on their investment.
Whether or not trading on equity is beneficial depends on a number of factors, including the investor’s risk tolerance, the potential return on the investment, and the interest rate on the loan. In general, trading on equity is more risky than investing with cash, but it can also be more profitable.
Option A is incorrect because trading on equity is not always beneficial. It can be a risky practice, and it can lead to large losses if the assets decline in value.
Option C is incorrect because trading on equity can be beneficial in some cases. It allows investors to leverage their capital and earn a higher return on their investment.
Option D is incorrect because trading on equity is a real practice that is used by investors. It is not a hypothetical situation.