Compared to mutual funds, hedge funds are usually subject to [MORE/LESS?] regulation. Suppose that Thompson Hedge Fund obtains and invests $3 of borrowed funds for every $1 of equity invested. In...

Compared to mutual funds, hedge funds are usually subject to
[MORE/LESS?]
regulation.

Suppose that Thompson Hedge Fund obtains and invests $3 of borrowed funds for every $1 of equity invested. In other words, it can invest $4 of assets for each $1 of equity. Also suppose that Thompson can achieve a 10% return on assets (ROA).

Given this ROA, the return on Thompson’s equity investment is[?]%.

Suppose that Thompson Hedge Fund obtains and invests $3 of borrowed funds for every $1 of equity invested. In other words, it can invest $4 of assets for each $1 of equity. However, suppose that Thompson suffers a 10% loss, or a -10% return on assets (ROA).

Given this ROA, the return on Thompson’s equity investment is
[?]%.