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Financial Risk Manager Part 1

Financial Risk Manager Part 1

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You are being asked to consider a hedge fund that is long US459millioninagivensetofequitiesandshortUS459 million in a given set of equities and short US459millioninagivensetofequitiesandshortUS258 in another set of stocks. Assuming that the risk free rate of interest is 1.09%, the fund’s equity is US$222 and the fund’s beta is approximately 0.59, determine this entity’s Gross Leverage and Net Leverage.

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