Currently a stock index stands at 100 and the leveraged ETF is selling for $100. The ETF should generate a return that is twice the daily return on the index. Over the next 21 days the value of the index and its daily percentage change are as follows:

Day Value of the Index Daily Percentage Change 1 100 —

2 110 10.0%

3 100 29.1 4 90 210.0 5 80 211.1 6 70 212.5 7 90 28.6 8 110 22.2 9 130 18.2 10 100 223.1 11 105 5.0 12 101 23.8 13 99 22.0 14 105 6.1 15 98 26.7 16 105 7.1 17 98 26.7 18 106 8.2 19 109 2.8 20 126 15.6 21 100 220.6 What is the value of the ETF at the end of each day? Notice that at the end of 21 days, the index is back to its starting value of 100.

What is the value of the ETF at the end of 21 days? Suppose that on day 22, the index rises 50 percent from 100 to 150; what is the percentage change in the ETF from day 1 through day 22? If you bought the ETF on day 1 and held it through day 22, did you earn the leveraged return that you expected?