leverage return calc

CFA Level III
#1

1.25% difference between total return - levered return * B/E 6.5%-4% * (50/100)

#2

yup, although leverage was 25/50 for my exam.

#3

KRochelli Wrote: ------------------------------------------------------- > yup, although leverage was 25/50 for my exam. yeah I think it was 25/50. same result

#4

total return + levered return * B/E 6.5% is the return shall be added, the same defination in the book

#5

kelvinqiu Wrote: ------------------------------------------------------- > total return + levered return * B/E > > > > > > > 6.5% is the return shall be added, the same > defination in the book The question I believe asked for the contribution of the levered return to the total return, which was 1.25%

#6

yep I got 1.25 as the additional return. Total return was 6.5+1.25 = 7.75 but that was not asked.

#7

1.25

#8

wasn’t it 50 borrowed 50 equity?

#9

I hereby wish to confirm that I suck.

#10

i got 1.25%

#11

MCPASS, i suck as well…this was so easy and i figured it out like 25 times and still couldn’t decide how to answer it.

#12

ruckmani Wrote: ------------------------------------------------------- > yep I got 1.25 as the additional return. Total > return was 6.5+1.25 = 7.75 but that was not asked. I had that too

#13

also got 1.25. at first i couldn’t for the life of me figure it out so i had to circle it and come back to it and then it was so easy.

#14

I wasn’t sure if the 6.5% included the leverage income or not so had to calc both ways including leverage didn’t get me one of the answers so went with the without and got the 1.25%

#15

1.25%

#16

was 7.75 also one of the answer choices? I know I had the equation right, but can’t remember if I only included the leverage contribution.

#17

I had 2.5% and felt really good about it. Haven’t got a clue what I was thinking.

#18

It was A)1.25 B)2.50 C)3. something…3.75 maybe