Determining the leveraged returns
You have a chance to make a $70,000 one-year investment. The investment is expected to earn 15%, and there are no taxes. If you borrow $45,000 at 9% and put up the other $25,000 with your own money, what will be your expected return on the $25,000?
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You have a chance to make a $70,000 one-year investment. The investment is expected to earn 15%, and there are no taxes. If you borrow $45,000 at 9% and put up the other $25,000 with your own money, what will be your expected return on the $25,000
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