Dynex Capital

-4.25%

1. Increased Volatility: Leveraged investments are highly sensitive to market movements, so even small movements can have a high proportional affect on the net value of Dynex Capital's investments. As a result, Dynex Capital's portfolio could experience greater volatility than a non-leveraged portfolio.

2. Higher Interest Rate Risk: Dynex Capital's use of leverage means that it is exposed to higher interest rate risk than a non-leveraged portfolio. A change in interest rates can impact the value of Dynex Capital's investments if it affects how much cash flow they generate or their cost of borrowing.

3. Refinancing Risk: Dynex Capital must be wary of taking on too much debt at any given time due to the risk of not being able to refinance its debt when it becomes due. Unexpected rate fluctuations or changes to Dynex Capital's creditworthiness could make it difficult for Dynex Capital to raise the funds it needs to refinance its debt when needed.

4. Counterparty Risk: Investments in leveraged securities involve certain counterparty risk, meaning there is risk that the other party to a contract may fail to meet its obligations. This could cause losses to Dynex Capital's investments.