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Definition of 'Overextension'
A loan or extension of credit that is larger than what the borrower can repay. Overextensions can require the borrower to consolidate his or her debts into a single loan. Consumers who must use more than a third of their net income to repay debt other than their mortgage are generally considered to be overextended.
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Investopedia explains 'Overextension'
For securities traders and investors, overextension represents leverage in excess of his or her account equity and buying power. This can greatly amplify losses in a bear market and force the trader to meet steep margin calls. Inability to do this can result in forced liquidation of securities and the freezing of the account.
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Search results for 'Overextension'
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http://www.investopedia.com/articles/financial-theory/09/government-subsidizing-risk.asp
... government absorbs the risk instead of letting these industries collapse when necessary,
the nation is put in a position of a catastrophic overextension of its ...
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