6. Hedge funds and financial leverage Compared to mutual funds, hedge funds are "open, in terms of allowing investors to make withdrawals. 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 20% 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 20% loss, or a -20% return on assets (ROA). Given this ROA, the return on Thompson's equity Investment is % Grade It Now Save & Continue Continue without saving 6. Hedge funds and financial leverage Compared to mutual funds, hedge funds are "open," in terms of allowing Investors to make withdrawals. Suppose that Thompson Hedge Fund obtains more sts $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 the less son can achieve a 20% 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 20% loss, or a -20% return on assets (ROA). Given this ROA, the return on Thompson's equity Investment is % Grade It Now Save & Continue Continue without saving