Leverage increases the portfolio duration as i know. According the Schweser (book3 71p), the formular for the duration of leveraged portfolio, Dp = (Di x I - Db x B) / E (invested fund duration x invested fund - borrowed fund duration x borrowed fund) / equity invested the question on the page is , the base information ============== 30 from own fund / 70 borrowed (borrowed fund w/ duration 1.0) invested fund duration is 5.0 ( but i cannot know what the ‘invested fund?’ is) ================ the answer is, (5.0x 100 - 1.0 x 70) / 30 = 14.33 But i thought the 5.0 duration to be matched with 30.(because it is invested fund) But why it is matched with 100?? We solve for the duration for the 100 investment with leverage. (=14.33) but what is the 5.0 duration then if it matches to 100 investment?

you borrowed (70) + put in own money (Equity=30) and invested portfolio of 100