Question: Equity: Levered Hedge Fund Example For help, see slide 45 of the Equity slides. Remember, net investment is the amount of the investment in the

Equity: Levered Hedge Fund Example For help, see slide 45 of

Equity: Levered Hedge Fund Example For help, see slide 45 of the Equity slides. Remember, net investment is the amount of the investment in the asset less the amount of the loan. Let's assume you manage a levered hedge fund. You invest $100 in asset A which rises 0.08 (note that this is in a decimal, so for instance, 0.05 means 5%) over the period of the investment. You borrow $80 to invest in asset A and the rate on the loan is 5% over the period of the investment The return over the period of the investment on the net investment is ? Enter your answer in a decimal with two places. That is, if your answer is 10%, write 0.10. IMPORTANT: DO NOT ROUND IF YOU HAVE INTERMEDIATE STEPS

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