Performance with Leverage:  Part II

Performance with Leverage: Part II

Yesterday, I covered return calculation for a portfolio with leverage.  To review, the background information is:The investor wants to acquire a 500 million euro property but only has 400 million in cashThe investor borrows 100 million euro in order to acquire...
Performance with Leverage, Part I

Performance with Leverage, Part I

Leverage can be a confusing topic, so I figured it is worth covering in a few blog posts.  In this first post, we’ll deal with return calculations for portfolios that employ leverage.Leverage is the use of borrowing, typically with an intent to amplify...