This is not a hard question, baiscally plug in and do if you know the concept. However the wording really threw me off.
The duration of the bond portfolio is 8.5- I thought they were refering to duration of the bond portfolio they already own, it turns out they were referring to the WHOLE portfoluo duration.
The question was asking for the duration of the LEVERAGED portfolio- thought that was referred to the WHOLE portfolio, because it has borrowed funds, it was actually referring to the borrowed funds only.
Am I the only one who was confused with the wording?