7.1 - Cases in Tail Events Flashcards
1
Q
Return on Equity (w/ leverage)
A
ROE = (ROA * L) - [r * (L - 1)]
ROA -> return on assets
L -> Leverage
r -> interest rate paid on leverage
-
Key Links
-
Subjects
-
Company
-
Find Us
-
CAIA Formulas > 7.1 - Cases in Tail Events > Flashcards
Return on Equity (w/ leverage)
ROE = (ROA * L) - [r * (L - 1)]
ROA -> return on assets
L -> Leverage
r -> interest rate paid on leverage
