Q1. Calculate the gross leverage, net leverage, long-only leverage for the following long- only fund, long-short...
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Q1. Calculate the gross leverage, net leverage, long-only leverage for the following long- only fund, long-short fund, general levered fund, dedicated short fund. (8 points) Long-only fund: Hedge fund manager raises $10,000, buys securities worth $10,000. Further borrows 50,000 and invests in securities. Long-short fund: Hedge fund manager raises $10,000, shorts securities worth $50,000, invests all cash in long securities. General levered fund: Manager raises $10,000, shorts $8,000 worth of securities, borrows $2,000, invests all cash in long securities. Dedicated Short fund: Manager raises $10,000, uses it as collateral to borrow $50,000 worth of stock. All proceeds are invested in cash. Q1. Calculate the gross leverage, net leverage, long-only leverage for the following long- only fund, long-short fund, general levered fund, dedicated short fund. (8 points) Long-only fund: Hedge fund manager raises $10,000, buys securities worth $10,000. Further borrows 50,000 and invests in securities. Long-short fund: Hedge fund manager raises $10,000, shorts securities worth $50,000, invests all cash in long securities. General levered fund: Manager raises $10,000, shorts $8,000 worth of securities, borrows $2,000, invests all cash in long securities. Dedicated Short fund: Manager raises $10,000, uses it as collateral to borrow $50,000 worth of stock. All proceeds are invested in cash.
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Answer rating: 100% (QA)
To calculate the gross leverage net leverage and longonly leverage for each fund we need to determine the total assets total liabilities and net asset... View the full answer
Related Book For
Investment Analysis and Portfolio Management
ISBN: 978-0538482387
10th Edition
Authors: Frank K. Reilly, Keith C. Brown
Posted Date:
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