MM Exam 2 AM 1C [Home in investment portfolio]

The vignette clearly states that her home (valued at 1,100,000 with a 400,000 mortgage) is included in her investment portfolio. Yet, when we calculate the rate of return, the answer key didn’t include the home/mortgage as part of the “beginning value” of the investment portfolio. Is there something I am missing here?

Apparently the wording of the vignette is unclear: she has a home valued at €1,100,000 against which she has borrowed €400,000, and that €400,000 is included in her portfolio, not the home itself.

So we take out the 400k from the investable base?

No.

Got it, that makes sense. Just wanted to make sure I wasn’t going crazy thinking that we still exclude the home even though she wanted it in her investment portfolio.