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An investor with a leverage ratio of 5 who can invest in a fund with a yield of 10% per year and can borrow at 5% per year has a return on assets of___and a return on equity of ____ 6%:30% 5%:25% 10%:50% 4%:20% 35%:5%

An investor with a leverage ratio of 5 who can invest in a fund with a yield of 10% per year and can borrow at 5% per year has a return on assets of___and a return on equity of ____ 6%:30% 5%:25% 10%:50% 4%:20% 35%:5%

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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An investor with a leverage ratio of 5 who can invest in a fund with a yield of 10% per year and can borrow at 5% per year has a return on assets of___and a return on equity of ____

6%:30%

5%:25%

10%:50%

4%:20%

35%:5%

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