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?


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.