Financial Risk Manager Part 1

Gross Leverage measures the total exposure (both long and short positions) relative to equity, while Net Leverage measures the net exposure (long minus short positions) relative to equity.\n\nGiven:\n- Long position = 459 million\n- Short position = 258 million\n- Equity = 222 million\n\nGross Leverage = (Long + Short) / Equity = (459 + 258) / 222 = 717 / 222 ≈ 3.23\n\nNet Leverage = (Long − Short) / Equity = (459 − 258) / 222 = 201 / 222 ≈ 0.91\n\nThe risk-free rate and beta are irrelevant for this calculation, as they pertain to other risk measures. Therefore, the correct answer is A.